Banking on change

By Greig Cameron on Nov 4, 09 01:05 PM in Banking

So after months of wrangling, posturing and hand wringing the shape of the post-credit crunch banking landscape in Britain is starting to take shape.

If you are here reading this then chances are you know the basics. Lloyds and Royal Bank of Scotland doing a mixture of fund raising, protecting assets and selling off sections of the business to avoid painful competition pitfalls.

Oh and probably a couple of thousand jobs lost in the process as well.

Certainly moves to open up the UK banking system to more competition are overdue and the possible rise of a new Scottish bank is not as ludicrous as it might have seemed a few months ago.

The likes of Tesco and Virgin, which both already have large operations in Edinburgh, may also be considering snapping up some of the branch networks which are coming up for sale.

If new entrants into the market mean an increase in business lending in Scotland then it has to be welcomed.

Similarly the rise of a new independent Scottish bank would undoubtedly help to rebuild some of the reputational damage done in the recent past and might help preserve or even create some jobs.

However things still feel a bit half-formed.

There's little certainty of what will happen to these banking assets at a time when the UK's economic recovery looks more fragile than most.

It might not always be better the devil you know but the sooner these disposals are resolved the better it will be for customers, employees and businesses.

While sympathy for bankers is, rightly or wrongly, in short supply I do feel a little sorry for Eric Daniels and Stephen Hester.

Daniels because he was railroaded into taking on HBOS and would probably not be in this mess were it not for that deal.

Hester meanwhile is clearly having to get rid of things he wants to hold on to.

It will be interesting to see how long he can hold on to the insurance arm - which includes Direct Line and Churchill - and what price he can extract.