EU state aid decision on Lloyds due Wednesday-source

* EU set to approve Lloyds' asset sales, dividend ban

* EU decision on overhaul for KBC, ING due on Wednesday

* EU ruling on RBS seen by mid-December

By Foo Yun Chee

BRUSSELS, Nov 17 (Reuters) - Plans by British lender Lloyds Banking Group Plc (LLOY.L) to sell parts of its operations in return for billions of pounds in state aid are to be cleared by EU regulators on Wednesday, a person familiar with the situation said.

The European Commission is reviewing a raft of bank bailouts across the 27 European Union states to ensure they do not skew competition. Many approved schemes have included asset sales, closing branches and reducing market share.

Part-nationalised Lloyds said earlier this month it would sell 600 retail branches, as well as its Internet banking unit Intelligent Finance and the TSB brand. [ID:nL3540088]

It will also face a dividend ban for two years and a prohibition on acquisitions for up to four years. "An EU decision is expected tomorrow," a source familiar with the process told Reuters on Tuesday. "Lloyds has pretty much disclosed what has been agreed with Competition Commissioner (Neelie) Kroes."

The European Union competition watchdog is also expected to approve on Wednesday Belgian bank KBC's (KBC.BR) restructuring and Dutch bancassurer ING's (ING.AS) break-up, the person said, adding a decision on Royal Bank of Scotland's (RBS.L) restructuring should come before mid-December.

ING said on Oct. 26 it would split in two to appease EU competition concerns after its bailout, marking its return to its retail savings bank roots. [ID:nLQ54845] KBC's overhaul is expected to be less drastic and it will be allowed to remain in banking and insurance in Belgium and eastern Europe, two sources familiar with the situation told Reuters last week. [ID:nLD70473] (Editing by David Holmes)