COMMERCIAL-IN-CONFIDENCE
RB Scotland
3
Others
9
TOTAL
100
Source: Lloyds submission
22. Although it seems that new entry into this market has occurred, and further expansion by the new entrants is likely, the characteristics of SFS (particularly the requirement for local branch presence, and for knowledge of the businesses and the individuals concerned, and a relationship of trust) mean that expansion is likely to be slow.
23. The regional and local pattern varies from the national picture. For example, a merged Lloyds and Midland would have 48 per cent of all bank branches in Wales and the South West, and 42 per cent in the West Midlands (compared with an England and Wales average of 36 per cent). In view, however, of the small travel-to-bank areas referred to above, local presence is more significant than regional shares.
24. An analysis by Lloyds of presence of branches in post code districts shows that only in 10 per cent of post code districts (covering 17 per cent of small firms) is there both a Lloyds and Midland branch; 76 per cent of post code districts (covering 65 per cent of small firms) contain neither a Lloyds nor a Midland branch. It seems that 59 per cent of Midlands and Lloyds branches are located in these overlap districts. However, it seems doubtful that post code analysis is relevant, since it appears that Lloyds and Midland have 33 per cent of the business (their national average) in the 76 per cent of districts where they have no branches.
c Banking for medium sized and large businesses
25. Not surprisingly at the smaller end of the medium range, the situation will not be substantially different from that applying to SFS, but as firms get large larger their options widen, and they are not tied in the same way to the local branch of the main clearers. Large firms can use the many foreign banks in London, or can borrow abroad.
26. Despite the wider options, the Lloyds and Midland shares are slightly higher among larger companies than among smaller ones (measuring lead banks among those that have more than one bank). Midland's figures show that they would have 32 per cent of medium-sized firm accounts, and 38 per cent of large firm accounts, compared with 29 per cent for small firms. However, there does not appear to be as much concern from a reduction in competition in this sector as is the case with banking for small firms.
d Money transmission services
27. These services include the clearing house system for
6
COMMERCIAL-IN-CONFIDENCE
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