Lloyds Banking Group PLC (LON:LLOY) is aiming to get its Berlin office ready for business in Europe by the end of the year ahead of Britain’s exit from the European Union, according to Reuters.
Quoting a person with knowledge of the matter, the newswire reported that Lloyds this month filed an application with Germany’s financial regulators to convert its local branch into a subsidiary, which will enable it to keep its continental operations within the EU, unaffected by Brexit.
READ: Lloyds sells London HQ to a Chinese property investment company for an undisclosed price
The move is more than a formality and will require Lloyds to inject capital into the business to underpin its activities, Reuters added.
That amount will depend on the ultimate size of the Berlin business but is expected to be in the low hundreds of millions of pounds, the source told the newswire, representing less than 1% of the bank’s overall capital.
Reuters reported last February that Lloyds - the only major British retail lender without a subsidiary in another EU country - was examining steps to turn its branch in the German capital into a subsidiary.
Frankfurt has been the preferred base for US banks preparing for EU trading after Brexit, with Morgan Stanley, Citi and JPMorgan so far choosing the city which hosts the European Central Bank for its operations.
For Lloyds, Reuters said, Berlin’s appeal is that it already has the bank’s main European branch with a full management team in place, including the finance, risk and human resources staff.
The bank is still expecting to transfer only a handful of jobs to the new subsidiary, the source told the newswire.