Brexit: Lloyds opens three branches in continental Europe

Lloyds Banking Group, a British financial institution with a tradition spanning over a quarter of a century, plans to operate three branches in continental Europe following Britain’s exit from the EU, claims an informed source to Reuters.

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It is expected that this largest British mortgage lender will manage its continental operations from a new branch in Berlin. Directors are currently planning two more branches to provide services to customers across the EU, the source told Reuters. There is a high likelihood that one of them will be in Frankfurt, while the location of the other is still unknown, the source added.

Lloyds’ plans – an institution with a tradition of over 250 years that has always focused on business in Britain – demonstrate how Brexit is forcing banks to abandon their history and business models to ensure the continuation of their operations in Europe.

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These Lloyds plans are part of a widespread trend where lenders, due to Brexit, are distributing their resources across numerous cities on the European continent and no longer base the majority of operations in one location as they have done for decades in London.

Swiss UBS already announced in March that it would continue with a “decentralized” model, in line with moves by Goldman Sachs, Bank of America, and JPMorgan.

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Such plans will incur higher costs and complexity as each branch needs to be capitalized and licensed by regulators. The mentioned post-Brexit plans, that each bank will choose one main continental headquarters as a replacement for London, with Frankfurt, Paris, and Dublin being the most frequently mentioned, are contrary to the expectations of many executives and analysts.