EC says it has not told Lloyds to sell Halifax
THE European Commission said yesterday that it had not struck a deal with Lloyds Banking Group that would see the lender dispose of Halifax in return for approval of the state aid it has received from the government.
EC competition commissioner Neelie Kroes has repeatedly signalled that the bank will have to dispose of assets, to allay fears that it has been put at a competitive advantage by state capital injections and the Asset Protection Scheme (APS).
But a spokesman for Kroes’ office said yesterday: “All banks receiving restructuring aid must… divest some of their activities. Contacts with the UK authorities on the restructuring of Lloyds (and Royal Bank of Scotland) are continuing but any suggestions as to which activities must be divested is pure speculation.”
An enforced sale of Halifax would be a disaster for chief executive Eric Daniels, given that the core banking operation of HBOS is the juicy part of the deal compared to the commercial property assets, which saddled Lloyds with huge writedowns.
Privately however, Lloyds executives feel that Lloyds will emerge with fewer enforced disposals than fellow part state-owned bank RBS.