07.02.09
Official Calls for British Banks to Shrink
LONDON — After forcing German banks that received state aid to drastically shrink, the European competition commissioner is now causing unease among some of their British rivals by saying that they are next.
The Royal Bank of Scotland and the Lloyds Banking Group were singled out by the commissioner, Neelie Kroes, at a news conference Tuesday in London.
The two banks, which received billions of pounds in state funds and count the British government as their biggest shareholder, might be forced to sell assets and reduce their liabilities because the aid helped them to remain leaders in some concentrated markets, Ms. Kroes said.
The scrutiny adds to the woes of the two British banks, which are struggling to get back on their feet and fulfill a pledge to return state money as quickly as possible.
R.B.S. and Lloyds declined to comment Wednesday on asset sales, but both have stepped up cost cuts recently.
R.B.S. is in the middle of a restructuring program that is to reduce its balance sheet by about 20 percent. It sold its $2.3 billion stake in Bank of China in January.
Lloyds said this week it planned to cut about 2,100 jobs, bringing the total number of cuts since April to about 7,650.
Official Calls for British Banks to Shrink
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