OFT publish Lloyds/HBOS merger report

[EXC]

The OFT have published their report into the merger of Lloyds & HBOS.

This will give the new bank a gargantuan 33% share of the personal current account market.

At the OFT/Beagles meet Tom Brennan was at pains to point out that, as with previous bank mergers, it was always the higher charging structure of the two banks that was adopted.

Despite the OFT's concerns, the merger was was given the green light yesterday by Peter Mandleson.


http://www.oft.gov.uk/advice_and_res...home/LloydsTSB

[Amethyst]

Re: OFT publish Lloyds/HBOS merger report

....................

The report, which the OFT submitted to the Secretary of State on 24 October 2008, contains the following advice and decisions:

• there is a realistic prospect that the anticipated merger will result in a substantial lessening of competition in relation to personal current accounts (PCAs), banking services for small and medium sized enterprises (SMEs) and mortgages
• the OFT's concerns on PCAs and mortgages are at the national (Great Britain) level, while its concerns on SME banking services are focused on Scotland. In addition, the OFT cannot exclude competition concerns arising at the local level in relation to PCAs and SME banking services,

• no further competition concerns are considered to arise in relation to the other identified overlaps between the parties in retail banking (savings, wealth management, personal loans, credit cards and pensions), corporate banking (banking services to large corporations, asset finance/fleet car hire) and insurance (PPI, life, general), and
• in the absence of any offer of remedies from the parties, it would not be appropriate to deal with the competition concerns arising from the merger by way of undertakings in lieu of reference to the Competition Commission.

The report also contains a summary of representations received on the stability of the UK financial system from a number of parties including the merging parties, the Tripartite Authorities (the Financial Services Authority, Her Majesty's Treasury and the Bank of England), the First Minister of Scotland, third parties active in the financial services sector, consumer interest groups, a newspaper and several individuals.

The majority of third parties considered that, in light of the extraordinary conditions in the financial markets, the merger would support financial stability, and was therefore in the public interest.



However, some third parties expressed concerns about the impact of the merger on competition in the medium to long-term. Concerns were also specifically expressed that the impact of the merger in Scotland would be against the public interest.


The OFT's report to the Secretary of State on jurisdictional and competition issues is binding and therefore any anti-competitive outcome identified by the OFT is treated as being adverse to the public interest unless it is justified by one or more relevant public interest considerations. In this case, the Secretary of State considers that the stability of the UK financial system outweighs the competition concerns identified in the OFT's report, and therefore has decided not to refer the case to the Competition Commission.
The Secretary of State's decision can be found on the BERR website.

[tomterm8]

Re: OFT publish Lloyds/HBOS merger report

So, what hapens when the Lloyds HBOS mamoth gets into trouble. It would be a bank easily double the size of the UK economy, and if it ever got into trouble (which, given the record, it is likely to eventually), the United Kingdom would have to change its name to New Iceland.

[EXC]

He he. Mind you the deal's not done yet as there's someone else in the frame. Sounds like HSBC to me.

http://news.bbc.co.uk/1/hi/business/7703908.stm
------------------------------- merged -------------------------------
If it was HSBC it would still give the new bank a 33% PCA market share, according to OFT's figures:

Lloyds 19
RBS 17
Barclays 15
HSBC 14
HBOS 14
Abbey 6
Nationwide 6
Others 10

[Amethyst]

Re: OFT publish Lloyds/HBOS merger report

HSBC already has a 'foothold in the mortgage market' in the UK doesn't it. But other than that yes it does sound like it could be them.

I do think the Lloyds TSB HBOS merger would be better (like I know sod all) as then it keeps it UK based, HSBC are ridiculously huge already.

[natweststaffmember]

Re: OFT publish Lloyds/HBOS merger report

I think that while they have a massive share of the market, there could be a shifting pattern emerging when they rationalise branches and outsource their branch telephony. They only started allowing customers to ring their branches a few years ago. I suspect the two phenomenon will impact on those figures. Some people just hate having their account moved to another branch of what they consider to be another bank. "Outsourcing" is not popular either.

[EXC]

Re: OFT publish Lloyds/HBOS merger report

Mysrery foreign bidder looms over HBOS.

http://business.timesonline.co.uk/to...cle5069044.ece