BRUSSELS -(Dow Jones)- The European Commission Tuesday said it intends to decide on the restructuring plans of troubled UK banks Lloyds Banking Group (LYG) and Royal Bank of Scotland Group PLC (RBS) in coming weeks.
The commission "has made very good progress in its contacts with the UK authorities on ensuring compliance with EU state aid rules as regards the restructuring of Lloyds and of RBS," said the commission's competition spokesman Jonathan Todd.
RBS, which is 70% state-owned, said earlier Tuesday that it plans to spin off its insurance arm and sell branches in England and Wales as part of a European Union-agreed restructuring plan that includes a GBP25.5 billion capital injection from the U.K. government.
Meanwhile Lloyds, which is 43% state-owned, said it aims to generate at least GBP21 billion of core capital so that it can avoid using the government's asset protection scheme. The bank will also dispose of an unspecified retail banking business that has a 4.6% current account market share and around 19% of mortgage balances. To meet EU requirements Lloyds will also sell GBP180 billion in non-core assets, and the bank will be forbidden from making certain acquisitions in the next three to four years.
-By Peppi Kiviniemi, Dow Jones Newswires; +3227411483; peppi.kiviniemi@dowjones.com