Royal Bank of Scotland and Lloyds Banking Group, both banks that operate private banking businesses, have submitted to the European Commission's restructuring proposals that may see the banks forced to sell off branches and other assets, the Financial Times reported.

The plans are needed to enable the banks to qualify for state aid, the FT said. The report did not specify whether any asset disposals would include wealth management divisions, such as RBS’ private bank, Coutts. So far, WealthBriefing has received no indication from either bank that they intend to divest wealth management units.

Lloyds could be forced to sell its Halifax or Bank of Scotland branch network to comply with European antitrust rules and RBS is understood to have given thought to selling branches if the European Commission were to demand significant divestment, the newspaper said.

Under European Union state aid rules, organisations that receive government support for longer than six months are usually required to restructure their operations to offset the competitive distortions resulting from the aid, the newspaper said. Earlier this year, for example, Commerzbank, the German bank which has received state aid from the German government, moved to sell off non-German assets, including the unit that includes Kleinwort Benson, the UK private bank.