Lloyds Banking Group could be forced to sell its Halifax or Bank of Scotland branch networks to comply with European anti-trust rules, Neelie Kroes warned on Tuesday, as the European Union’s competition commissioner stepped up her threats to break up two of the UK’s four big banks.

Ms Kroes, who also warned that Royal Bank of Scotland was “highly dangerous” to Europe’s single market, told the Financial Times at a London banking conference that Lloyds would have to make a “viable carve-out that won’t lead to job cuts”. She said that could well mean the forced disposal of Halifax or BoS branch networks.