Eric Daniels defends Lloyds’ high street dominance

Eric Daniels, chief executive of Lloyds Banking Group,  has defended the bank’s high street dominance amid reports the bank could be broken up.

The Financial Times reports that last week Clare Spottiswoode, member of the Commission on Banking, hinted that the HBOS deal could be reversed.

Speaking at a roadshow for the Commission she told delegates: “We might suggest reversing what happened on that day a few months ago when Lloyds took over another bank.”

But Daniels says he has an agreement with the previous government that the deal would stand and called on the government to honour that pledge.

He says: “There was a sentiment that financial stability was more important and that the issue of competition took second place. As a result the secretary of state signed off the deal. That is a matter of public record.”

Lloyds has submitted a “substantial” response to the Commission on Banking.

Daniels makes the case that a concentrated market does not mean an uncompetitive one.

He says: “Look at Canada, look at Australia. They have been stable yet concentrated. One of the popular misconceptions is that competition and concentration are in conflict, that there’s some kind of trade-off to be made between stability, competition and concentration.

“Concentration can lead to stability but doesn’t necessarily lead to a lack of competition.”