BRUSSELS, Nov. 18 (Xinhua) -- The European Commission (EC) approved here on Wednesday the restructuring plan of the British bank Lloyds for its 19 billion euros (about 28.6 billion U.S. dollars) state recapitalization.

"This plan effectively addresses the commission's competition concerns and at the same time ensures the return of Lloyds Banking Group to long term viability," Competition Commissioner Neelie Kroes said.

    After thoroughly assessing Lloyds' situation, the EU Commission found that the proposed restructuring measures were "compatible with the EU rules on state aid to remedy a serious disturbance in a member state's economy."

A pedestrian passes the head office of the Lloyds Banking Group in central London Aug. 5, 2009

    A year ago, after being hit hard by the global financial crisis, the bank was substantially bailed out by the state. EU said that Lloyds' plan to sell off more than 600 retail banking branches would facilitate the entry of a new competitor and would help remove the distortions of competition created by the British government bailout.

    The EU commission pointed out that Lloyds would "pay a significant proportion of the restructuring costs, ensure a sustainable future for Lloyds without continued state support and that there will not be undue distortions of competition."

    The commission found that the exit fee which will be paid by Lloyds Banking Group for not participating in the Asset Protection Scheme is sufficiently high to compensate for the advantage the bank gained from its announced participation of March 7, 2009. The Lloyds Banking Group is the entity resulting from the acquisition of HBOS by Lloyds TSB in January 2009.