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Government to create three new high street banks

Pa
Sunday 01 November 2009 05:10 EST
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Three new high street banks are to be set up as part of a major shake-up by the Government, it was reported today.

According to The Sunday Telegraph, Alistair Darling will announce that Treasury-controlled Royal Bank of Scotland and Lloyds Banking Group are to be broken up.

As part of a bid to increase competition and recoup taxpayers' cash following last year's bailout, some of the banks' assets will be sold off to leave three new-look high street chains.

They will include the return of TSB - whose branches were taken over by Lloyds - and Williams & Glyn's, which is owned by RBS.

There will also be a new BankCo, described as the "good" portion of Northern Rock, which is completely state-owned. RBS and Lloyds are majority-owned by the taxpayer.

Ministers are seeking to recoup the billions of pounds of taxpayers' cash spent bailing out the sector last year.

The Chancellor could announce the moves to the House of Commons within days.

The Sunday Telegraph reported that nobody who currently owned a British retail bank would be allowed to take over the new institutions so buyers are expected to come from the US, Australia and the Middle East.

None of the sales are expected to go through before the general election expected next spring.

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