Lloyds Banking Group (LON:LLOY) is looking to set up a third European Union subsidiary in Luxembourg, Reuters has reported. The news comes as the bailed-out lender continues to prepare for the UK’s upcoming exit from the bloc.
Lloyds’ share price has climbed higher in today’s session, having added 0.68 percent to 62.01p as of 08:49 BST, marginally underperforming the broader UK market, with the benchmark FTSE 100 index which currently stands 0.86 percent higher at 7,430.33 points. The group’s shares have lost about eight percent of their value over the past year, as compared with about a two-percent rise in the Footsie.
Third EU subsidiary in Luxembourg
A source told Reuters that Lloyds was seeking a licence in Luxembourg to ensure continuity of service for life insurance customers based in the EU. The source added that initial discussions with regulators in Luxembourg had already taken place, with further talks planned over coming weeks. The FTSE 100 group, however, reportedly has no plans to relocate UK-based employees to run the subsidiary, but would instead hire around a dozen people to provide the necessary services to its EU-based Scottish Widows policyholders.
The update comes after it emerged earlier this year that Lloyds was planning to operate three subsidiaries in continental Europe. The group’s main EU subsidiary is expected to be in Berlin, while another one is likely to be in Frankfurt.
Analysts on bailed-out lender
BNP Paribas, which is ‘neutral’ on Lloyds, set a price target of 70p on the shares yesterday, while earlier this week, Deutsche Bank, which rates the bailed-out lender as a ‘buy,’ set a valuation of 76p on the stock. According to MarketBeat, the FTSE 100 group currently has a consensus ‘buy’ rating and an average price target of 75.80p.