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Lloyds Tells Brussels It Will Carve Up Empire To Keep Hold Of Halifax

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Sir Win Bischoff, chairman of Lloyds Banking Group, has offered the European Commission a huge shake-up of the group’s empire in an attempt to hold on to Halifax, the mortgage lender that Lloyds TSB acquired when it bought HBOS last year.

Sir Win flew to Brussels on Thursday for a meeting with deputies of Neelie Kroes, the Competition Commissioner, to present Lloyds Banking Group’s revised proposals as it tries to head off penalties for state aid, The Times has learnt.

It is thought that Sir Win, in his first week as chairman of the bank, offered to sell Scottish Widows, the investment fund group, Cheltenham & Gloucester, the former building society, some branches of Lloyds and some branches of Halifax, and to spin off a significant tranche of the bank’s mortgage book.

In exchange, it is hoped that the EU Competition Commissioner would not force it into a total sell-off of the Halifax bank — a move that would almost certainly trigger the resignation of Eric Daniels, the Lloyds chief executive who led the takeover with Sir Victor Blank, the Lloyds chairman. Sir Victor has already resigned from Lloyds.

People close to the negotiations described the meeting as “very positive†but cautioned that discussions still have some way to go.

However, Brussels insiders added that incremental reductions in the size of different parts of Lloyds’ business would not answer the Commission’s concerns about lack of competition in the UK personal banking and mortgage market.

Lloyds Banking Group, 43 per cent owned by the taxpayer, has about 30 per cent of each market.

The Commission is already in negotiations with the UK Government about what remedies to impose on British banks to compensate for the billions they have received in state aid, and its opening stance was that Lloyds might need to sell Halifax.

Lloyds had tried to argue that the only remedial action required was that it sell off Cheltenham & Gloucester and a number of branches in Scotland.

Looks like Win want's a monopoly there's no other reason to want to keep a turd, unless of course Llodys is having a spot of bother and is seeking to keep the big turd so questions don't get raised about how the company is being run because it can all be blamed on the HBoS.

It looks like Browns forced deal may ultimately be vetoed by the EU, although it may not effect Brown as by the time they make a decision over this we will hopefully had an election and he'll be long gone. If this merger is blocked by the EU just what will that mean for HBoS and it's sugar daddy the UK taxpayer?

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