Sunday 12th of May 2024
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Lloyds, Royal Bank of Scotland and Northern Rock will be broken up and parts of their businesses sold off to create three new banks, it emerged last night.

Government sources said ministers were "determined" to see more competition in the market, following the £1.2 trillion bailout of the sector which resulted in the loss of three independent banks and several building societies.

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ING break-up spooks UK bank shares

UK bank shares have been shaken amid fears over harsher than expected sanctions from European regulators as the price of state support.

Part-nationalised Royal Bank of Scotland lost more than 4% while Lloyds Banking Group was down almost 3% as markets digested the dramatic break-up of ING Bank, announced on Monday.

ING, which received a 10 billion euro (£9.1 billion) hand-out from the Dutch Government a year ago, is splitting up its banking and insurance arms, and selling its US business to slash its balance sheet.

The company, which has cut more than 10,000 jobs this year, also announced a 7.5 billion euro (£6.8 billion) rights issue and is not allowed to be a price leader in any European country until the Dutch Government is repaid.

Royal Bank of Scotland, which is 70% owned by the taxpayer, and Lloyds Banking Group - 43% state-owned - are nervously awaiting the European Commission's verdict on their own restructuring plans.

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