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Alistair Darling to unveil plans to break up Lloyds and RBS
Three new banking chains to be created, offering a better deal for the consumer
Three new high-street banking chains are expected to be created by the government by splitting up Royal Bank of Scotland and Lloyds Banking Group, it emerged last night.
Alistair Darling is expected to confirm over the next few days that assets belonging to the two banks, which are majority-owned by the taxpayer, will be sold off to boost competition. Ministers say the move will fulfil Gordon Brown's promise to taxpayers that they would get "payback" for the multibillion-pound bailout of the sector last year.
The new banks will be standard retail banks concentrating on deposits and mortgages and offering what ministers hope will be a better deal for the consumer with an invigorated mortgage market and more competition.
The new banks could include TSB – whose branches were taken over by Lloyds – and Williams & Glyn's, owned by RBS. There may also be a new BankCo, described as the "good" portion of the completely state-owned Northern Rock. Minsters says the move will mean the dismantling of the established "monopoly" over retail banking held by the high-street giants – which include Barclays, Santander (owner of Abbey) and HSBC.
Stephen Hester, chief executive of RBS, is believed to have discussed the final details of the plan with the prime minister on Friday afternoon. Under the deal, the new institutions, which have roots in past banking organisations, will not be taken over by any purchaser that currently owns a British retail bank.
Ministers will stop this happening using their powers as controlling shareholders in Lloyds, RBS and Northern Rock, rather than through new regulations. Likely purchasers are expected to come from the US, Australia or the Middle East.
The government, which holds a 70% stake in RBS and a 43% stake in Lloyds after last October's bailouts, could announce the sell-off plans as early as Tuesday.
The move comes after the EU last week backed plans to split nationalised Northern Rock in two.
Three new banking chains to be created, offering a better deal for the consumer
- Toby Helm, Whitehall editor
- The Observer, Sunday 1 November 2009
- Article history
Three new high-street banking chains are expected to be created by the government by splitting up Royal Bank of Scotland and Lloyds Banking Group, it emerged last night.
Alistair Darling is expected to confirm over the next few days that assets belonging to the two banks, which are majority-owned by the taxpayer, will be sold off to boost competition. Ministers say the move will fulfil Gordon Brown's promise to taxpayers that they would get "payback" for the multibillion-pound bailout of the sector last year.
The new banks will be standard retail banks concentrating on deposits and mortgages and offering what ministers hope will be a better deal for the consumer with an invigorated mortgage market and more competition.
The new banks could include TSB – whose branches were taken over by Lloyds – and Williams & Glyn's, owned by RBS. There may also be a new BankCo, described as the "good" portion of the completely state-owned Northern Rock. Minsters says the move will mean the dismantling of the established "monopoly" over retail banking held by the high-street giants – which include Barclays, Santander (owner of Abbey) and HSBC.
Stephen Hester, chief executive of RBS, is believed to have discussed the final details of the plan with the prime minister on Friday afternoon. Under the deal, the new institutions, which have roots in past banking organisations, will not be taken over by any purchaser that currently owns a British retail bank.
Ministers will stop this happening using their powers as controlling shareholders in Lloyds, RBS and Northern Rock, rather than through new regulations. Likely purchasers are expected to come from the US, Australia or the Middle East.
The government, which holds a 70% stake in RBS and a 43% stake in Lloyds after last October's bailouts, could announce the sell-off plans as early as Tuesday.
The move comes after the EU last week backed plans to split nationalised Northern Rock in two.
