'Big Four' UK banks set to face CMA competition probe
- 17 July 2014
- From the section Business
Markets watchdog the Competition and Markets Authority (CMA) is set to recommend a full competition inquiry into banks, the BBC has learned.
BBC business editor Kamal Ahmed said any full-scale inquiry into the banking sector would include looking at current accounts and business lending.
The big four High Street banks, which provide 77% of current accounts, will be watching the CMA's decision closely.
They may ultimately be forced to divest businesses and allow new competitors.
Lloyds Banking Group, Royal Bank of Scotland, Barclays and HSBC are considered to be the big four high street banks.
A full-scale inquiry would take about 18 months to complete.
As well as their monopoly on current accounts, the big four also control some 85% of business lending.
The CMA was officially launched in April and is made up of the Office of Fair Trading and the old Monopolies and Mergers Commission.
The Office of Fair Trading said in March - before the CMA creation - that there was evidence, not necessarily conclusive, of a lack of competition in banking.
But the British Bankers' Association has argued that now is not the time to investigate competition in the banking sector, because the industry is undergoing some major changes.
These include the introduction of new technology, such as mobile banking, and rules to make switching accounts easier.
In addition there has also been the emergence of competitors such as Tesco, Virgin Money and TSB.
They will be joined by the Williams and Glyn brand, which will be split out of RBS.