UK banks face break-up as competition inquiry looms
Ahead of expected announcement from the Competition and Markets Authority, Vince Cable writes to RBS chief to tell him to speed up Williams & Glyn divestment
Britain's biggest high street banks face being broken up as the result of a landmark competition inquiry which is expected to be announced on Friday.
The Competition and Markets Authority (CMA) is on Friday morning expected to fire the starting pistol on a full-blown competition inquiry into the banking sector.
The CMA, the UK’s competition watchdog, is expected to make the announcement at 7am on Friday, ahead of the stock market open, on the back of findings from its study into competition in banking.
The inquiry, which is likely to only report after next May’s General Election, will trigger measures to allow a more level playing field for so-called 'challenger banks’ such as TSB and Metro, and possible reductions in the size of some of the larger incumbents.
Shares of the big four banks - Barclays, HSBC, Lloyds Banking Group and the Royal Bank of Scotland - are likely to be knocked as investors question future profitability.
The CMA’s decision follows Labour leader Ed Miliband’s call for the big banks to be broken up, a policy announcement which was widely dismissed by rival politicians.
On the eve of the CMA announcement, Vince Cable, the Business Secretary, wrote to Ross McEwan, chief executive of RBS, telling him to accelerate a partial break-up of part of its UK business.
RBS is being forced to sell off Williams & Glyn (W&G) as the result of a European Comission diktat on the back of the £45bn of state aid RBS received at the height of the financial crisis.
The W&G business - which is being sold to a consortium of investors including the Church of England Commissioners through an accelerated initial public offering (IPO) - will consist of 316 branches, covering 1.7m customers, and a 5pc share of the UK’s SME market.
In the letter, a copy of which has been seen by The Telegraph, Mr Cable demands “greater clarity” on the “path to divestment” of W&G - made up of 316 renamed RBS branches and a sizeable SME portfolio - which under current plans will not be fully divested until the end of 2017.
Mr Cable, who last month said he was frustrated by the time taken by RBS to extricate the business, which the bank previously tried and failed to sell to rival Santander.
“Business continues to raise concerns with me that the length of the process risks reducing the impact of the full divestment...because it could increase the possibility of gradual erosion of the divested business’s customer base,” he wrote.
The Business Secretary goes on to suggest that even if the initial IPO cannot take place before 2016, RBS should consider rebranding the branches sooner, and publish a “clear timelin
Those are my exact sentiments, the only difference between us is I wait for bigger swings. The theory being I don't need the money for anything and if I only do one deal per year, if i have met my target I am happy with that. Funnily enough I have one eye on Barclay's and I would have been severely tempted to change allegiance had I got out of RBS at £3.45. The one thing that puts me off is I have seen two of my clients receive very substantial payouts amounting to tens of thousands of pounds each on these interest rate swaps in the last 6 months. Barclay's have put up no fight and pay them 8% interest on any payout. If these payouts go across the board with their other business customers then the total sum involved could be similar to their PPI claims and a lot of these interest rate swap payouts may well be still in the pipeline
I take many of your points as like some of my thoughts... better the share you get to know theory..
That said the future looks like the range bound continuing... with the exception of the range moving up a bit...
IMO .. and any new major change will come first from the BOE interest rate increasing ....creating an increase in profits. and pushing up the SP.... and then Government selling their stake and then Dividends start being paid...all I suppose will happen over an unknown time period.... Plus any Foreign involvement being another possible unkown issue.
In the meantime I will plod along with my one single RBS share system until it fails me ..I have had a good near 3 year run so far...better the devil you know...
I Have self taught myself to a workable system with non greed and patience, and profit theory targets... that has worked for me.. less mistakes as I have gone along.. and still make a few but.having good fun and enjoyment to achieve some success, with my own thinking and wits....
I have missed a few sell days before a big drop.. but patience often corrects the loss.... to profit... time I have plenty of.. if I stay in cash for 2 months waiting for a drop, so be it... over the year profit is what counts to me.. with 10% plus I am happy...and 5 trades plus...as and when they happen...just take everyday as it comes ..
PS .. One thought. Barclays have had real a battering the past 6 months...down from 290p to 210p... maybe, I do not know .. they may prove to be very cheap now .. if anyone has a better knowledge of the banking sector possibly rising in the future with interest rate rises .....or whatever... or a Barclay turnaround in fortunes.
GLA as always...Time for a pint and salad roll in the garden... keep smiling...
I know it goes against every rule in the book having all eggs in one basket but I counterbalance that with stay in my comfort zone. I know this share well and like the fact it does not pay dividends and has restricted supply but unrestricted demand.There is also always a chance of Chinese or Middle Eastern investment and if this happend there will be serious money to be made.I Aldo genuinely believe that the next results will be good and we should be getting to the end with all the PPI crap. That said fluctuations are needed in order to make money. if the share price stablises over a period of time then I am likely to loose interest and not bother with it after then
Think she was becoming a bit disenchanted with the market generally . Or more accurately the LSE boards ......If you see her tell her to pop in , take care , good to see you . Off to indulge in a large one before I turn in , Slange .
So far so good , so far so good , lol.....bit on the warm side , better than freezing ones nuts off in Aberdeen , old boy . Surprised you haven't come across her , number of boards you've been on in the last month.
The problem of moving such large numbers was one of my reasons for largely getting out of it. I still have a few thousand shares but feel more comfortable now that my funds are spread over a number of other shares. I can still use mailman's strategy, much the same as your own, but have a variety of options, including RBS, as to which and when to buy and sell. I keep looking for the shares that drop well below their net worth with the intention to buy and hold for their recovery. Some will take a year or two, others within the same year. GL
Given the current trading range 300 - 380 ish your strategy always seemed pretty sensible to me , bit of patience required on occasion , but if the last 5 years have proved anything it's that to a greater or lesser degree , it's always a gamble . Won't even go into the benefits of stop losses , everybody hates them , lol. . Not sure why .
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