BANK OF Scotland (Ireland) postponed disclosing the outcome of its strategic review at the end of July pending a decision on a disposal of assets by its parent bank, Lloyds Banking Group, in order to satisfy EU rules on state aid.

The Irish bank had been due to announce plans in July to shrink its business radically with the closure of its 44-branch Halifax retail branches under consideration.

Staff were told a “significant development” had led management to seek an extension to the review of the Irish business. Lloyds must receive state aid approval from the European Commission for the £15 billion of UK taxpayer money injected into the bank and HBOS, in a bailout last year. The commission has indicated Lloyds will have to make significant disposals to win approval.

It’s understood Lloyds decided to delay announcing the outcome of the internal review pending further developments on state aid approval from the commission for the UK government’s investment.

Any decision on the future of operations at Bank of Scotland (Ireland) are unlikely to be made until Lloyds reaches agreement with the commission on the divestments of its businesses. A spokesman for Bosi declined to comment. The bank said last month the internal review of its operations was “open-ended”.

Lloyds indicated earlier this year it may have to reduce its business by selling or otherwise exiting “non-core businesses” but warned EU approval for state aid “could require the group to divest or exit core businesses”. Banking sources said closure of Halifax in Ireland or a reduction in Lloyds’ Irish operations would be premature before the EU decision on asset disposals, given the Irish unit could be sold as part of a divestment of businesses across the banking group.