Lloyds warns Brexit would spark economic uncertainty

UK bank says hard to judge likely longer-term impact of UK leaving EU

Lloyds chairman, Norman Blackwell, has expressed his support for Brexit in a personal capacity. Photograph: Reuters

Lloyds chairman, Norman Blackwell, has expressed his support for Brexit in a personal capacity. Photograph: Reuters

 

Lloyds Banking Group said a possible vote in favour of Britain leaving the European Union in a June referendum will likely spark economic uncertainty and potential volatility in the short term.

Exiting the EU would mean “no certainty over how the UK’s position outside the EU would evolve,” the London-based bank said in a statement on Thursday after its board discussed the potential implications for the lender, its customers, staff and shareholders.

 Several senior financiers across Europe have warned that a vote in favour of ‘Brexit’ would be catastrophic for the UK economy and could drive banks to relocate jobs overseas, damaging London’s status as a global business hub.

The comments from the 9.2 per cent state-owned bank come after its chairman, Norman Blackwell, supported a UK departure from the EU, when speaking in a personal capacity. 

“With no certainty over how the UK’s position outside the EU would evolve, the longer-term economic impact is unclear,” Britain’s largest mortgage lender said.

Lloyds has dropped 5.8 per cent this year, with investor concern over Brexit helping push the shares below the 73.6 pence average price the UK government paid in its £20.5 billion (€26bn) bailout at the height of the financial crisis. Chancellor of the exchequer George Osborne in January postponed the sale of further government shares in Lloyds, citing “turbulent financial markets.”

Bloomberg