TNAG-2474-FCO40-3604-Business-matters-in-Hong-Kong-acquisition-of-Midland-Bank-by-1992 — Page 109

COMMERCIAL-IN-CONFIDENCE

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On the basis of our latest work we believe that the above approach is likely to entail the sale of about 150 branches. As we explained yesterday, sale of branches on this scale would seriously cut back the much needed reduction in excess capacity of the banking industry and also strain the financial justification for our acquiring the Midland Bank. We would therefore need to go into both the methodology and each specific instance of proposed disposal very carefully with you to make certain that every branch included was necessary on a sensible interpretation of the desired degree of maintenance of choice. We would also need to get the approval of our board.

I hope the above provides a basis on which the Director General would be prepared to take this matter forward to find an undertaking in lieu of a reference.

Yours sincerely,

(Sir Robin Ibbs)

COMMERCIAL-IN-CONFIDENCE