Nov 18, 2009, 13:02 GMT
Brussels - European regulators Wednesday cleared the restructuring plans of three major banks hit by the global financial crisis - Dutch concern ING, Britain's Lloyds HBOS, and Belgium's KBC.
European Competition Commissioner Neelie Kroes said all three plans complied with the European Union's strict rules on state aid and would secure the bank's long term viability. Possible distortions to competition will be prevented through the sale or run-down of assets.
ING, which has received 15 billion euros (22.3 billion dollars) in taxpayers' money, is to reduce the risk profile and complexity of its operations and sell its insurance activities.
Lloyds is to 'exit the riskier and more volatile lending activities in which HBOS had engaged' and focus on 'core corporate and retail banking activities' instead, Kroes said.
The banking group has received a fund injection worth 17 billion pounds (28.5 billion dollars) from the British government, but will now pay 'a significant proportion of the restructuring costs' itself, regulators said.
As far as KBC is concerned, its restructuring package foresees divestments, run-down and listing of various businesses, including the sale of its European Private Banking business. The commission said it was also satisfied that KBC is to pay a significant proportion of the restructuring costs.
Since the outbreak of the financial crisis, the commission has published four sets of guidelines and adopted more than 100 individual state aid decisions.
'We are slowly turning the corner, away from the rescue phase, and towards focusing on restructuring,' Kroes said.
'We want to ensure that banks can be rebuilt so that they can play their role in helping Europe's economy to recover and will not be a long-term burden on Europe's taxpayers,' the commissioner added.
Your Talkback on this Story