Lloyds could move its registered office to London

3rd Sep 2014 10:28

Lloyds Banking Group, Britain's biggest bank, could move its legal base from Edinburgh to London if Scots vote for independence later this month.Should Scots vote 'yes' and decide to sever their ties with the rest of the union on September 18, Lloyds could move its registered office to London, according to banking industry sources quoted by Reuters.Support for the Scottish independence campaign has risen sharply over the past month, with the possibility that a majority of Scots will vote in favour of leaving Britain, leading many businesses to make contingency plans.If that was to be the case, its Scottish arm Bank of Scotland would operate as a foreign division from Edinburgh.Lloyds' registered office and its legal address are in the Scottish capital, meaning that were Scotland to achieve independence, the bank would be classified as a Scottish business.Economists have warned that Scotland might not be big enough to host both Lloyds and rival Royal Bank of Scotland (RBS), given Scotland-based banks have assets worth over 12 times the country's economic output and Lloyds has already said independence could impact its funding, compliance and tax costs.Furthermore, in the wake of the 2008 crisis, Lloyds received a £20.5bn bailout from the British government, which left the taxpayers with a 40% stake in the lender, which has since decreased to 25%.However, London policymakers have warned that, were the bank to remain in Scotland in case of independence, it would no longer be able to call upon the Bank of England (BoE) if it needed to do so.Alex Salmond, Scotland's First Minister, said that in case of a 'yes' majority at the referendum, the country would become officially independent in March 2016, which would give Lloyds and RBS about 18 months to assess their options."The scale of potential change is currently unclear, but we have contingency plans in place," Lloyds said in a statement."In the event of a 'yes' vote in the referendum, there would be no immediate changes or issues which could affect our business or our customers. "There will be a period between the referendum and the implementation of separation, should a 'yes' vote be successful, that we believe is sufficient to take any actions that we believe necessary."According to Reuters, Lloyds and RBS have already held preliminary discussion with the BoE to draw up a contingency plan in case of Scottish independence.DC