Newspaper article The Evening Standard (London, England)

Reined in, but Black Horse Looks a Good Bet

Newspaper article The Evening Standard (London, England)

Reined in, but Black Horse Looks a Good Bet

Article excerpt


LLOYDS TSB and Abbey National have nearly 30% of the current account market between them.

The Fair Trading Act dictates that a share of more than 25% of any market raises significant competition issues and can be referred to the relevant authorities.

In that context, the new Director General of Fair Trading, John Vickers, is well within his rights to refer the Lloyds bid and Trade Secretary Stephen Byers is perfectly justified in following Vickers' recommendation.

The current account market has changed beyond recognition in recent years, however. Barclays, Lloyds, Midland (now part of HSBC) and NatWest (now part of Royal Bank of Scotland) still sit astride the market, but there are numerous new options for restless customers.

The converted building societies, including Abbey National, and the internet banks are all chasing current account business and it has never been easier to switch operators. Traditionally it has been said that it is more common to divorce your spouse than switch banks, but Halifax chief executive James Crosby maintained earlier this week that such apathy is a thing of the past.

Even if this claim is slightly optimistic, the opportunity to move is clearly there, which makes the Vickers/Byers decision disappointing.

The Black Horse bank has indicated that it will fight on. Its recent results were underwhelming and a deal with Abbey could do much to shore up its rather battered reputation. Whether Abbey's two and a half million small shareholders are prepared to hang around until June is open to question.

Faced with the alternative of a possible nil-premium merger with Bank of Scotland, the Lloyds choice looks much more inviting.

Such a waste

ONE of Britain's most respected businessmen told me recently he had never known a time when companies were having to grapple with so many issues.

Perhaps that is why in December no fewer than 130 chief executives of listed American companies lost their jobs. …

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