TNAG-2474-FCO40-3604-Business-matters-in-Hong-Kong-acquisition-of-Midland-Bank-by-1992 — Page 119

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inance for working capital reduced from four to three. There are .lready questions of the extent to which customers can move from one bank to another; generally such customers are viewed as poor credit risks. Nevertheless, a Lloyds/Midland merger would provide an unusual opportunity for structural change to be engineered in the UK banking system.

30 The HSBC Holdings bid on the other hand would preserve the domestic banking structure largely unchanged, including the perceived competition in the small business sector; it would also result in a third global bank being headquartered in London.

Banking Supervision Division HO-2 6 May 1992

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JC W Osborn (5005) and L W G Nelson (5109)

ZWG Nelson

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