Bank restructuring 'will aid competition'

PricewaterhouseCoopers (PwC) has said that the restructuring plans outlined for the Royal Bank of Scotland and Lloyds Banking Group will benefit competition in the UK banking sector.

Commenting on the announcement that hundreds of RBS and Lloyds branches will be sold off, PwC spokesperson John Hitchins said that the government is attempting to ’stimulate competition in the banking market’ with the changes.

The sales, which were demanded by the European Commission, will see Lloyds lose at least 600 of its UK branches.

’In general terms competition is a good thing because … it helps reduce prices and helps stimulate innovation,’ Mr Hitchins explained.

He also said that the era of dominance by ’six banks who are major providers in each category of financial services’ is unlikely to return in the UK, with competition in particular sectors expected to grow.

RBS is expected to shed 318 branches - 14 per cent of its retail network - in the UK as part of the restructuring process.

In return, the government has agreed to put an additional £39.2 billion into both RBS and Lloyds.
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