The Lloyds Banking Group is preparing to set up a second subsidiary in the EU after Brexit, Reuters reported on Thursday.

The biggest Mortgage lender in the UK is planning to establish a subsidiary in Luxembourg, as the group expects to lose its passporting rights after the UK leave the EU on March 29, 2019.

Unlike a branch, a subsidiary implies a new banking license and requires its own capital base.

The group apparently will not be transferring jobs from the UK to Luxembourg but will be hiring locally for the running of its insurance service brand, Scottish Widows.

Scottish Widows offer life assurance and pensions. The most significant part of their client base is in the UK, and its centre of operations in Edinburgh, Scotland.

Luxembourg is a financial services hub, pitching itself to the City of London as a post-Brexit partner in insurance and asset management.

Lloyds already has a subsidiary in Germany, with a branch in Berlin. The bank is also planning to expand in Frankfurt for its trading operations.

Lloyds follows in the footsteps of Swiss bank UBS, Goldman Sachs, Goldman Sachs, JP Morgan, Bank of America and Deutsche Bank that are setting up subsidiaries in the EU.