The threat of Lloyds TSB cornering the market for personal current accounts was the dominant fact...
The threat of Lloyds TSB cornering the market for personal current accounts was the dominant factor that persuaded the Department of Trade and Industry to block the bank's proposed merger with the Abbey National.
Referring to the recommendations of the Competition Commission the secretary of state for trade and industry Patricia Hewitt said the merger would be against the public interest and should not go ahead.
"This is because it would reduce competition in the markets for personal current accounts and banking services for small and medium sized enterprises, with the adverse effects in both markets of higher prices to customers and reduced innovation," said Hewitt. Other options were considered admitted Hewitt before the regulator decided to oppose the merger.
The DTI decision said Lloyds TSB has been acknowledged. In its first comment since the decision was announced by the regulator the bank says that it is still firmly of the view that a combination of Lloyds and the Abbey National would not have impacted adversely on competition.
"The growth opportunities for Lloyds TSB are very considerable with or without Abbey National. We will continue to focus on delivering value for our shareholders through organic growth and acquisitions."
Abbey National refused to comment saying they would issue a statement to the City later today.
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