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| Lloyds and RBS could be forced to sell more branches | Lloyds and RBS could be forced to sell more branches |
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| Lloyds Banking Group and Royal Bank of Scotland could be forced to hive off more branches than they already have up for sale after George Osborne instructed the Office of Fair Trading to consider if a bigger disposal programme could boost competition in small business banking. | Lloyds Banking Group and Royal Bank of Scotland could be forced to hive off more branches than they already have up for sale after George Osborne instructed the Office of Fair Trading to consider if a bigger disposal programme could boost competition in small business banking. |
| The chancellor said he had asked the OFT to consider "what more can be done" to foster competition in providing banking to small businesses as part of the review into the sector which was announced on Wednesday. | The chancellor said he had asked the OFT to consider "what more can be done" to foster competition in providing banking to small businesses as part of the review into the sector which was announced on Wednesday. |
| The EU already requires RBS to sell 316 branches – a project codenamed Rainbow – and Lloyds 632 branches – codenamed Verde – under the terms of the £65bn bailouts for both banks during 2008 and 2009. | |
| It was not clear whether Osborne's remarks were more focused on RBS, whose branch sell-off is targeted at small business banking and where he has already announced a review into whether the 81%- taxpayer owned bank should be broken up into a good and a bad bank. | |
| In the Mansion House speech on Wednesday night, when he launched the review of the possible breakup of RBS and signalled that the government's 39% stake in Lloyds was being readied for sale, the chancellor also said he wanted to know whether the branch sell-offs will do enough to increase competition. | In the Mansion House speech on Wednesday night, when he launched the review of the possible breakup of RBS and signalled that the government's 39% stake in Lloyds was being readied for sale, the chancellor also said he wanted to know whether the branch sell-offs will do enough to increase competition. |
| Referring to the OFT's announcement that it is following the advice of the parliamentary commission on banking standards and has accelerated its review of small business banking, Osborne said he wanted "to make sure our small firms get a fair competitive deal from the banks". | Referring to the OFT's announcement that it is following the advice of the parliamentary commission on banking standards and has accelerated its review of small business banking, Osborne said he wanted "to make sure our small firms get a fair competitive deal from the banks". |
| "As part of this work I have asked the OFT to review the impact that the new challenger bankers created by Lloyds and RBS will have on strengthening competition in small business banking and to identify what more can be done," he added. | "As part of this work I have asked the OFT to review the impact that the new challenger bankers created by Lloyds and RBS will have on strengthening competition in small business banking and to identify what more can be done," he added. |
| A wide number of options are likely to be considered, including analysis of whether a bigger package of branches should be sold off. The EU is expected to have to approve any changes to the divestments, which are supposed to be complete by the end of the year but are expected to fall behind schedule. The delay is owing to Lloyds' sale of the Verde branches to the Co-op breaking down, as a result of the latter's problems, and the failed branch sale talks between RBS and Santander. | A wide number of options are likely to be considered, including analysis of whether a bigger package of branches should be sold off. The EU is expected to have to approve any changes to the divestments, which are supposed to be complete by the end of the year but are expected to fall behind schedule. The delay is owing to Lloyds' sale of the Verde branches to the Co-op breaking down, as a result of the latter's problems, and the failed branch sale talks between RBS and Santander. |
| Both networks are now being lined up for stock market flotations. From September the Lloyds' branches will adopt the revived TSB brand, while RBS could reinstate the Williams & Glyn's name. | |
| In February Osborne heralded the Co-op deal as creating "upstart challengers offering new and better services that shake up the established players". | In February Osborne heralded the Co-op deal as creating "upstart challengers offering new and better services that shake up the established players". |
| The enlarged bank would have had a 7% share of personal current account market, which is dominated by Lloyds, HSBC, RBS and Barclays. In small business banking, the market share of the big four is even higher – at 85% – according to the analysis in the 2011 report by the independent commission on banking, chaired by Sir John Vickers. | The enlarged bank would have had a 7% share of personal current account market, which is dominated by Lloyds, HSBC, RBS and Barclays. In small business banking, the market share of the big four is even higher – at 85% – according to the analysis in the 2011 report by the independent commission on banking, chaired by Sir John Vickers. |
| It described Verde – which represents 4.6% of current accounts – as on the "borderline" of being a viable smaller bank. Most of these have failed to grow significantly in the past. | It described Verde – which represents 4.6% of current accounts – as on the "borderline" of being a viable smaller bank. Most of these have failed to grow significantly in the past. |
| The Vickers commission had considered whether Lloyds should add more customers to its Verde sell-off to increase its market share to 6% and at one point suggested the branches being sold off could be packaged up with Northern Rock, since sold to Virgin Money. | The Vickers commission had considered whether Lloyds should add more customers to its Verde sell-off to increase its market share to 6% and at one point suggested the branches being sold off could be packaged up with Northern Rock, since sold to Virgin Money. |