The European Commission (EC) has approved the acquisition of UK-based TSB Banking Group by Spain’s Banco de Sabadell.
A part of Lloyds Banking Group, TSB specializes in providing retail banking services to individuals and households along with commercial banking services to small and medium-sized enterprises in the UK.
Sabadell that is debuting in the UK market provides banking and insurance services, primarily in Spain.
TSB’s divestment is a part of Lloyd’s reorganization plan aiming at limiting distortions of competition created by the public aid Lloyds received during the financial crisis.
EU Commissioner in charge of competition policy Margrethe Vestager said: "Lloyds’ recent progress, including the sale of its stake in TSB approved today, shows the effectiveness of EU state aid rules. Lloyds was able return to normality following the state support received.
"The Commission worked together with UK authorities to design a restructuring plan that ensured Lloyds’ long-term viability and limited distortions to competition created by the aid."
Assessing the merger under the simplified merger review procedure, the commission cleared the acquisition as it was not expected to raise competition hackles because of the companies’ moderate combined market shares and limited overlap in concerned markets.
Lloyd has been divesting its stake in TSB through an initial public offering and subsequent disposals on the London Stock Exchange since June last year.