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Ring-fencing

Information about ring-fencing and Lloyds Banking Group.

After the financial crisis, UK legislation was passed in 2019 to better protect customers and the day-to-day banking services they rely on.

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

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 £35 billion (averaged over a three-year period) 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.
     

Our approach to ring-fencing

Following the completion of our ring-fencing changes, Lloyds Banking Group comprises of the following:

A ring-fenced sub-group

Comprising the majority of our Lloyds Bank, Bank of Scotland and Halifax banking activities including current accounts, savings and deposits.

A non-ring-fenced sub-group

Lloyds Bank Corporate Markets is our non-ring-fenced bank, offering most of the products and services which are no longer available from our ring-fenced banks under the legislation.

  • Commercial Banking Markets Financing, including loan markets, bonds and asset securitisation.
  • Commercial Banking Financial Markets Products, including elements of FX and rates.
  • Business undertaken by Lloyds Bank International Ltd and the Group’s branches in the United States, Singapore and Crown Dependencies.

An insurance sub-group

Scottish Widows Group Ltd and subsidiaries.

An equity investments sub-group

Lloyds Development Capital and other strategic investments.

Each sub-group operates alongside but independently from each other within Lloyds Banking Group.

 

This diagram illustrates the Group structure:
 

Structure chart shows Lloyds Banking Group as the parent company, with these four beneath: Ring-fenced bank Non ring-fenced bank Insurance LDC and other investments

Ring-fenced and non-ring-fenced entities within a UK banking group are rated separately by the credit rating agencies. Financial information for Lloyds Banking Group and its subsidiaries is available on the financial downloads page.