Lloyds Said to Pick Berlin for European Subsidiary Amid BrexitBy
British bank needs to retain access to German and Dutch units
Lloyds said to employ about 300 people in Germany’s capital
Lloyds Banking Group Plc, Britain’s largest mortgage lender, is set to pick Berlin as its base to maintain access to the European Union’s single market following Brexit, according to a person with knowledge of the matter.
The U.K. bank opted to convert its German branch into a subsidiary and plans to apply for an extension to its banking license, said the person, who asked not to be identified because the details are confidential. Lloyds may move a small number of jobs to the country and will apply for the changes later this year, the person added. Reuters reported the news earlier on Monday.
Lloyds employs about 300 people in the German capital operating its Bank of Scotland business as an online lender, with about 9 billion pounds ($11 billion) of consumer deposits, the person said. The bank has been weighing locations including the Netherlands, where it has about 6 billion pounds of residential mortgages, to maintain access to its EU clients and European payments systems, people familiar with the matter have said.
Lloyds has authority from the U.K.’s Financial Conduct Authority to provide services in 31 different European Economic Area states, analysts at Citigroup Inc. led by Andrew Coombs wrote in a note to clients last month. Following the vote to leave the EU, the U.K. “will now have to renegotiate these rights, which has huge implications for the global investment banks and for the U.K. banks themselves,” he said.
Bloomberg News last month reported that the bank was set to pick Frankfurt as its EU base, though a final decision hadn’t been made. A spokesman for Lloyds declined to comment.