Gradual relaxation of the UK bank levy still likely, says Nomura

Although Chancellor George Osborne was noticeably silent on the matter of the UK bank levy on Wednesday, Nomura still expects to see a gradual relaxation."With a majority Tory government now in place, we expect a gradual relaxation of the UK bank levy over time," it said.Nomura said it suspects the government would like to complete any relaxation well before the next election, so it's likely to be four-year phase out.It sees three possible scenarios.The first would be that a UK bank levy is applied on the EU or UK balance sheet, but £2.5bn is still collected from the sector. This would be negative for Lloyds and Royal Bank of Scotland, but positive for Standard Chartered and HSBC, said Nomura.The second is that the UK bank levy is applied on the EU or UK balance sheet but the amount collected from the sector falls as the levy is not charged on global balance sheets. This would be neutral for Lloyds and RBS, but positive for StanChart and HSBC.Finally, the construct of the levy would remain the same but the government would reduce the levy over time, making it more manageable for the sector. This would be positive for the sector as a whole, said Nomura."We do not expect the government to make it more punitive for Lloyds and RBS by increasing their share of the levy, so we rule out the first scenario. The remaining scenarios are potentially feasible and positive for the sector," it said.