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Wednesday, December 8, 2010

Royal Bank of Scotland and Lloyds Heads Defend Large Banks

Royal Bank of Scotland and Lloyds Heads Defend Large Banks : Splitting up Britain's banks would not make the industry more competitive, the head of Lloyds Banking Group has told Parliament.Eric Daniels gave evidence in front of the Treasury Select Committee as part of an inquiry into competition and choice in the banking sector.

"This is an enormously competitive market and I am not sure that dividing banks further would give a better outcome," he said.

Echoing the sentiment, the chief executive of Royal Bank of Scotland (RBS) Stephen Hester said the idea of size being anti-competitive was a "red herring".

"Concentration does not lead to lack of competition," Mr Daniels added.

With nearly a third of the current account and mortgage market, Lloyds is the leading provider of retail banking products in Britain.

It was rescued by the Government during the financial crisis, soon after it took over HBOS, and is currently 41% state-owned.

RBS was effectively nationalised in 2008 after it amassed losses totalling £24.1bn - the largest in UK history - under the helm of Sir Fred Goodwin.

Mr Hester told MPs the sale of the Government's shares in RBS would be "a symbol of Britain's recovery". He said he would welcome the move, adding it would help RBS and provide a boost to the nation's finances.

Mr Daniels refused to say when the Government's 41% take in Lloyds should be sold off but held out the prospect of a windfall for the Treasury. For the latest updates PRESS CTR + D or visit Stock Market news Today

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