Bad news for bank shareholders

David Kuo, Director at the popular financial website The Motley Fool - Fool.co.uk, says: "It was inevitable that Lloyds Banking Group and Royal Bank of Scotland sell assets to repay taxpayers for the emergency bale out. The question was never whether they would have to dispose of assets but how much of their business they would have to give up.

"However, the European Union and the Government are misguided in their demand for more competition amongst UK banks. The consolidation of Alliance & Leicester, Bradford & Bingley, Northern Rock, and more recently Standard Life Bank, is testament that the UK has too many banks for a shrinking market.

"To create artificial competition will be damaging to existing banks at a time when they need to rebuild their balance sheets.

"Bank investors should tread carefully and look to institutions that are not overly reliant on the UK market. These include Standard Chartered, HSBC and Barclays."