Government to create three new high street banks

Author: PA

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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