Bank break-ups cautiously welcomed
THE sell off of more than 900 branches at Royal Bank of Scotland and Lloyds Banking Group has been cautiously welcomed by Yorkshire business leaders amid fears of job culls in the region.
The two banks employ thousands of people in Yorkshire who now face an uncertain future.
The European Commission yesterday demanded the two state-backed banks sell off the branches to ease competition concerns following Government intervention in the two institutions.
Howard Kew, chief executive of Financial Leeds, which promotes the financial and professional services sector in the Leeds city region, said: “We welcome measures that bring more competition to the market for both business and retail customers. We will be watching closely to see how the reorganisation develops, as both banks have significant operations in Leeds and across Yorkshire, especially RBS’s insurance arm.
“We shall continue to make case that the fundamental quality and strength of the financial services sector, the skilled workforce and quality of life in the Leeds city region make this area an attractive location for investment and growth now and in the future.”
Yorkshire Forward’s chief executive Tom Riordan said the regional development agency welcomed any moves that would increase competition.
However, Minister for Yorkshire, Rosie Winterton, said she was concerned about potential job losses and said she would be investigating the ramifications for the region.
RBS will sell 318 branches, while Lloyds will dispose of more than 600 branches over the next four years.
Lloyds, which bought Halifax-based HBOS last year, also confirmed it would stay out of a government-run insurance scheme.
Lloyds, which is 43.5%-owned by the government, will instead raise £21bn, including a £13.5bn rights issue and a £7.5bn debt swap.
In addition to the sales of RBS branches in England and Wales, RBS will sell its NatWest brand in Scotland, RBS Insurance and Global Merchant Services, its card payment business.
The total disposal will be 318 branches in the UK, or 14% of the RBS retail network.
Lloyds will sell at least 600 branches, or about 4.6% of the total market share of UK current accounts.
That includes the TSB brand in England, Wales and Scotland and mortgage broker Cheltenham & Gloucester, as well as the Intelligent Finance online business.
