Brussels may make banks axe 10% of clients

Royal Bank of Scotland (RBS) may have to shed 10% of its small business customers if the European Commission, keen to penalise the bank pay for for receiving billions of pounds in state aid, gets its way.Brussels wants RBS, 70%-owned by the UK taxpayer, to give up about 100,000 of its one million small business customers, according to The Times this morning.The British bank, which owns about third of the market, is resisting the plan and wants to cap its divestments at a significantly lower level, says the newspaper, without citing sources.Lloyds Banking, in which the government has a 43% stake, is also under pressure from the Europeans to cut its share of personal accounts. It's the UK's biggest player with 22m customers.The Times reports that Brussles also wants Lloyds to shed 10%, or more than 2m personal account holders.It's thought the banks are willing to doa deal closer to 5%, but they're both said to be struggling with the problem of how the accounts will be reduced. One idea is that a new vehicle could be created which would then be sold to a new entrant to the banking market.A Lloyds spokesman told The Times: "We continue to engage in dialogue with the Treasury and the European Commission." RBS is reported as saying: "In keeping with other banks we are working with the Treasury to try and reach a satisfactory outcome with the Commission."