Ring-fencing and Lloyds Banking Group

Following the financial crisis, UK legislation was passed to better protect customers and the day-to-day banking services they rely on.

The new rules mean large UK banks must separate personal banking services such as current and savings accounts, from risks in other parts of the business, like complex wholesale and investment banking. This is called “ring-fencing”.

Banks are taking different approaches to how they are implementing these rules and are making changes now, to complete them by 1 January 2019.

You can find out more about ring-fencing and bank structural reform legislation, on the Financial Conduct Authority’s website and the Bank of England’s website.

The legislation requires all UK banking groups with core deposits - broadly deposits from retail and small business clients - of over £25bn (averaged over a 3 year period) including their branches in the European Economic Area (EEA), to separate their activities into:

  • A ring-fenced bank (RFB) – for retail activities, and which is also permitted to carry on most commercial activities.
  • A non-ring-fenced bank (NRFB) – for complex wholesale client banking needs and banking that is booked outside the European Economic Area (EEA).

Following the Court approving the Ring-Fencing Transfer Scheme (RFTS) on 12 April 2018, Lloyds Banking Group is on track to comply with the legislation in advance of the 1 January 2019 deadline. You can read the full update here. The transfer of relevant client agreements and related business will take place on 28 May 2018, known as the ‘Effective Date’. If there are any exceptions to this, we will contact those clients separately.

We will continue to add information about ring-fencing to our website over the coming months. Please check this page for regular updates.

What ring-fencing means for you

Day-to-day banking services such as current and savings accounts.

Our business and commercial clients.

Other interested parties.