Consumer choice to suffer from HBOS Lloyds TSB merger

Andrew Hagger of Moneynet.co.uk comments on what the Lloyds TSB takeover of HBOS will mean for consumers.

Whilst the new combined mega-bank will reportedly have retail savings balances in excess of £200 billion, potentially making it a force to be reckoned with, it will be interesting to see the customer acquisition strategy it adopts going forward.

HBOS has for many years had a reputation for offering extremely competitive products making it a regular player in best buy tables, particularly in the savings, current account and credit card arenas.

On the other hand, Lloyds TSB products have been less competitively priced than HBOS, although both brands have in the past made extensive use of TV advertising to plug their wares.

So will the keenly priced HBOS products be pulled from the shelves, perhaps be toned down or will the enlarged LloydsTSB take a more aggressive stance?

It is a concern that consumers will be faced with a far more limited choice of products on the back of this merger and the previously announced Abbey takeover of A&L. No matter what the terms of the merger and the size of the new beast, we are waving goodbye to an element of competition in the personal finance market.

The events of the last few days will undoubtedly involve all UK lenders taking an even more cautious approach to personal lending, and with an increased unwillingness between banks to lend to each other, we are likely to see a further spike in savings rates in an effort to tempt more retail deposits through the front doors of their high street outlets.