The Finance Owl

Banks – Loans – Mortgages – Money

Brussels May Impact Lloyds Bank Loans

Posted by theaccountant September - 26 - 2009 - Saturday

Lloyds TSB BankOne of the leading media agencies has apparently been told, sounds a bit hearsay I admit, that Brussels may be establishing plans to close a selection of Lloyds branches.

This would be unsurprising if true. Since Lloyds took over HBOS during the turbulent times post the collapse of Lehman bank last year, there have been numerous concerns about the Lloyds Bank goliath that has been allowed to be born.  The new larger Lloyds Bank has suffered share price turbulence and has not seen the best of times over some periods of the past twelve months.  The best may yet be to come though and this is the concern of Brussels and thus the European Union.

When the market does start to pick up Lloyds will be in a very strong position to offer its portfolio of banking financial products, such as Lloyds secured loans or LLoyds personal loans, to the market.  The concern of Brussels is that, despite best of intentions by the UK Government, Lloyds may have become the sleeping banking Goliath which is awaiting for the bank loan market to return to the best of times.  With the new powerful banking position, some have even been heard to say “monopolistic” which is a little over the top probably, Lloyds will be in a very powerful position to drive the market and potentially limit banking loan competition.

I share the concerns of Brussels since as banks become bigger and bigger Governments around the world become unable to let them fail.  This results in the banks having one of the best positions in the global market place.  Nobody worried that much when some of the largest and best retail companies started to fail, due to the inability to pay bank loans during the recession.  The same cannot be said for the large banks, such as Lloyds.  If Brussels and the EU do step in, the sleeping Lloyds giant may never be allowed to waken when the best of banking times returns.  Thus the alleged closure of the Lloyds branhces, may stop Lloyds making future super-profits due to an over dominance in the market.  In my opinion though it may result in increased competition and thus consumers such as you and I are probably more likely to get better bank loans.

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