The European Commission on Wednesday approved restructuring plans for British bank Lloyds, Dutch counterpart ING and Belgium’s KBC bank, all rescued by public bailouts during the global financial crisis.
In three separate rulings the EU competition watchdog ruled that the proposed restructuring measures were “compatible with the EU rules on state aid to remedy a serious disturbance in a member state’s economy.”
The banks received substantial state bailouts after being caught in the maelstrom of the financial meltdown last year.
The restructuring measures were designed to make them viable banking operations.
For KBC, the only one of the three not to have announced the nature and scale of its restructuring plan, the commission said it “foresees structural and financial restructuring through the divestment, run-down and listing of various businesses.”
The bank “will divest or run down a significant number of businesses, including in Central and Eastern Europe… Furthermore, it will divest a banking business (Centea) and an insurance business (Fidea) in Belgium,” the EU competition watchdog announced.
Lloyds has announced that it will offload branches in Scotland, its Cheltenham and Gloucester branches, and the Intelligent Finance online unit.
While backing the plans, the EU commission noted that Lloyds would pay “a significant proportion of the restructuring costs, ensure a sustainable future for Lloyds without continued state support” without undue distortions of competition.
Dutch bank ING announced last month that it planned to sell off its insurance operations and raise 7.5 billion euros — five billion of which would go to paying back its government emergency funding.
EU Competition Commissioner Neelie Kroes said ING’s restructuring plan was “adequate to restore ING’s viability… and distortions of competition caused by the aid measures are sufficiently addressed.”
