Lloyds Banking Group is reportedly planning to manage three subsidiaries in continental Europe post-Brexit to service its customers across the European Union (EU).
A source familiar with the matter told Reuters that instead of earlier plan to manage its continental business from one new subsidiary in Berlin, the bank is now likely to set up two more subsidiaries.
One subsidiary will be established in Frankfurt, where Lloyds already has a branch, while the base for another subsidiary has not been decided yet, the publication quoted the source as saying.
The revelation comes at a time when the UK government ditched its earlier plans to maintain close relation with the EU in the financial sector after the UK’s bids adieu to the EU in March next year.
Lloyds’ strategy aligns with a wider trend followed by other financial institutions of allocating their resources among a number of European cities instead of relying solely on London.
Earlier in March this year, Swiss lender UBS announced plan to adopt a “decentralised” model, similar to the strategies adopted by other global banks such as Goldman Sachs, Bank of America and JPMorgan.
However, the plans to establish new European entities is expected to burden Lloyds with substantial costs and complexity as each new subsidiary will require its own licences and capital reserves.