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STATEMENT |
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17 September 2008 |
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LLOYDS TSB TO TAKE OVER HBOS |
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The Campaign for Community Banking Services (CCBS) welcomes the proposed takeover of HBOS by Lloyds TSB to remove potential concerns for customers of all banks from the current market panic affecting HBOS, however unjustified that may be, but calls upon government to extract some protective pledges in return for waiving the usual competition scrutiny and providing liquidity support to the sector. Whatever is said initially, one can expect in due course that mergers of overlapping branches will take place to reduce costs and for the combined total of 2998 branches (including 163 Cheltenham & Gloucester) to be substantially cut over time. In England & Wales Halifax are understood to have 685 branches, mostly in high footfall town centre sites, and Lloyds TSB 1645 with a much wider spread of community type. There will be few places where a Halifax branch exists with no Lloyds TSB nearby and the merger of such overlapping branches will hold few concerns for CCBS but the loss of an innovative, differentiated, competitor from the traditional banking sector is to be regretted. More important will be the attitude of the new bank to Halifax’s c 900 “agencies” which although offering a very limited banking service, in some smaller communities provide the only financial services outlet apart from the post office or the only competition for an incumbent bank. Also, the continuation or not of Lloyds TSB’s progressive closures of its own rural ‘last banks’ (of which c 100 remain) following the abandonment of its ‘keep open’ pledge 2 years ago. Pledges in respect of both these should be sought by government as part of the process for waiving the usual competition rules and providing essential liquidity support for the sector in its hour of need. In Scotland the combined group will account for 505 (Bank of Scotland 320 and LTSB 185 branches) out of a total of 995 (51%) and here there must be more concern over loss of competition. There are also implications for the relationship with Post Office Ltd. Lloyds TSB has a long standing agency arrangement for all its personal customers to use post office counters (which pre dates the post office becoming a competitor in the financial services market) and HBOS does not. Contact:
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