Lloyds Bank expands number of Brexit EU subsidiaries to three

The group, which includes Bank of Scotland, was expected to run the majority of its continental business from Berlin, where it has around 300 staff.

However, it has now been reported that the bank will also open an additional subsidiary in Frankfurt to support its euro bond trading business, and a third operation will support its closed-book insurance business.

Offering an insight into the nature of doing business in the post Brexit world, Lloyds’ arrangements illustrate how each of the new subsidiaries will need its own licences and capital reserves in order to conform with new regulations designed to prevent a repeat of the financial crisis.

Reuters reports that Lloyds needs to run its euro trading business from the continent to ensure it can smoothly continue operations after Brexit.

However, this could not be run from the Berlin unit because of new “ringfencing” rules forcing banks to separate their retail and investment-banking operations.

Frankfurt is Europe’s largest centre for euro bond trading outside of London, and Lloyds already has a branch in the city.

A location for the third subsidiary had not been decided but the new arrangements are not expected to require significant job moves.