Lloyds Banking Group is close to selecting Berlin as a European base to secure market access to the European Union when Britain leaves the bloc, sources say.
Britain’s largest mortgage lender was examining steps to turn its branch in the German capital into a subsidiary and may apply for a licence to do so later this year, the sources said.
Lloyds, which declined to comment, is the only major British retail lender without a subsidiary in another EU country and it would be the first major lender to commit to Berlin as a hub to access the rest of the continent after Britain quits the EU.
Many other European banks are considering Frankfurt, the country’s main financial hub and the home of the European Central Bank, as the preferred destination.
Lloyds, which has almost all of its assets in Britain, has been examining how to retain its EU clients and maintain access to the European payments system.
Banks are expected to announce more concrete plans for how they will adapt to Brexit in the coming months after Prime Minister Theresa May confirmed in a speech in January that Britain would leave the European single market.