Lloyds looks to turn German Bank of Scotland outfit into post-Brexit European HQ

According to reports, the still partly taxpayer-backed banking group will apply for a licence later this year that would convert its Bank of Scotland-branded operations in Germany into a separate European division.

Lloyds presence on the continent works out of a Bank of Scotland branch in the German capital.

Lloyds took over Edinburgh-based Bank of Scotland as part of its HBOS acquisition in 2008.

The appeal of the location for operations after the UK leaves the EU is that as the bank’s main European hub it already has a full management team and 300-strong workforce in place, including the finance, risk and human resources staff required of a full subsidiary.

Franz von L’Estocq, the managing director for Bank of Scotland in Germany, is based in Berlin, where the bank offers savings accounts, private banking and consumer and car loans.

Therefore, in terms of staff and logistics, the Berlin branch would only need to change the status of those roles to meet legal requirements for a subsidiary, rather than having to transfer more people, according to one of the sources.

It is understood that few jobs would leave London as a result of the move.

Lloyds is currently the only major high-street lender without an EU subsidiary and was previously thought to be eyeing up existing offices in Frankfurt and Amsterdam.

The choice of Berlin would be a first for a UK bank for its European hub.