Increase in competition for UK banks

News announced today that the main banks in the UK are going to be divided and sold to new entrants to increase competition.

This should be an interesting time for UK companies as an increase in competition could lead to a number of benefits for them. This is a big deal for the government as it now holds large shares of RBS and Lloyds. The Chancellor Alistair Darling has said he will wait for the time to be right so that the tax payers get their money back.

There could be some new banks coming to the UK's high streets over the next few years. The new banks will concentrate on deposits and mortgages.

This still needs to be approved by the European competition commissioner Neelie Kroes. The division of Northern Rock has already been approved.

The main question is will they be sold for less than the tax payers have paid for them?