Lloyds sell-off plans approved

Plans by part-nationalised Lloyds Banking Group to sell off parts of its business were formally approved by the European Commission today.

Earlier this month Lloyds announced proposals to dispose of at least 600 branches - around a fifth of its UK network - to soothe European competition concerns over the public support it has received.

The bank is also raising £21 billion to strengthen its finances and prevent the taxpayer's stake rising beyond the current 43 per cent.

Competition Commissioner Neelie Kroes said: "This plan effectively addresses the Commission's competition concerns and at the same time ensures the return of Lloyds Banking Group to long term viability."

Under the restructuring, the businesses up for sale represent a 4.6 per cent share of the UK personal current accounts market and around 19 per cent of the bank's mortgage assets.

Parts of Lloyds to be sold within four years include the TSB brand, and Cheltenham & Gloucester, Lloyds TSB's branches in Scotland and some additional Lloyds TSB branches in England and Wales, as well as the Intelligent Finance online banking business.

Lloyds announced the fundraising plans to avoid a taxpayer-backed insurance scheme for toxic debts mostly inherited from its rescue of HBOS, which would have seen the public stake rise to 62 per cent. It will also pay a £2.5 billion break fee to the Government.

The Commission added: "The plan ensures a fair burden sharing of past losses and that the bank and its capital providers make a significant contribution to the financing of the restructuring costs."

A Lloyds spokesman said: "The group welcomes the approval from the European Commission for its restructuring plan as it provides certainty."