Competition and choice in retail banking - Treasury Contents

Written evidence submitted by Mr and Mrs Ralph


We read that you are seeking comments from organisations and individuals regarding banking competition as part of the newly commissioned review. We further understand that in advance of that review, you support the break-up of partly owned banks such as Lloyds and RBS - we find this extremely disappointing.

Could we ask that you bear in mind the plight of several million small shareholders, including ourselves, who've lost a substantial part of their savings as a result of the Lloyds/HBOS merger. To enforce a demerger beyond that required by the EU would be devastating to share value. Lloyds did the previous government, and by implication, the present coalition, a huge favour by taking over HBOS at the height of the credit crisis. We believe it has managed the integration process well but it is surely not right to destroy value to its shareholders (including the taxpayer) by further government intervention beyond that required by the EU state and roles.

In our view, there is adequate competition on the High Street and the banks which survived the crisis without direct government assistance will, in any event, but stronger entities and therefore control the market. Lloyds and RBS are weakened and will need many years to recover, but further demands on them could well destroy them only for foreign banks to take over.

We would be grateful for these comments to be taken into account in your deliberations.

July 2010

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