Two big UK banks submit restructuring plans to EU

Two major UK banks bailed out by the British government have submitted restructuring plans to European Union regulators for approval.

The European Commission is reviewing restructuring proposals from dozens of lenders to ensure that state aid given to the banks does not distort competition in the 27-country European Union.

Competition Commissioner Neelie Kroes has said the regulatory focus would now shift to British lenders after the EU executive cleared such plans from Germany's Commerzbank and WestLB.

Asked whether any British banks had handed in restructuring plans to the Commission, Philip Lowe, director general for competition at the EU executive, told reporters:

"Two very big banks in the United Kingdom in the months of June, July submitted restructuring plans."

He declined to identify the banks.

The British government took a 70 per cent stake in RBS and 43 per cent of Lloyds as part of a taxpayer-funded bailout worth £37 billion last year after losses on credit-backed assets hit both banks.

The two banks have to come up with restructuring plans to comply with EU antitrust regulations. New EU rules unveiled earlier on Thursday could see the lenders forced to sell large chunks of their assets and hold back on takeovers.

RBS and Lloyds declined to comment on whether they had submitted restructuring plans to Brussels. An RBS spokesman said the bank was reviewing the details of the EU guidelines.

"As we have previously stated we, along with all UK banks in receipt of state aid, are working closely with HM Treasury to demonstrate to the European Commission that Lloyds Banking Group has a strong plan to exit state aid," a Lloyds spokesman said.

She said it was too early to say what the result of the review would be.