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A million small shareholders who bought TSB shares in 1986 will find themselves holding the same number of shares in Lloyds TSB, and each is likely to be worth about 20p more than their present TSB holdings were worth before the bid. Their investment will also be valued around three times the price they paid nine years ago, and they will get a special dividend of 68p a share net as an additional reward for their tenacity.

Shed no tears either for the TSB executives who may get the chop. They will be well rewarded for their loss of office, although because of the way the deal is structured it is the Lloyds Bank senior executives who stand to get the profitable options.

But this is not a public utility being taken over. There is no regulator calling for a better deal for customers as part of the price of letting the bid go through, and there will be no sops for customers in the shape of reductions in their bank charges.

Lloyds Bank's chief executive, Sir Brian Pitman, is promising the savings made from the merger will enable the new bank to sell financial services more efficiently. But TSB customers are unlikely to see any immediate reward in the shape of better service, and in practice many of them will find their handy local branches shut and the business transferred to a local Lloyds Bank branch which may or may not be as convenient.

They can always vote with their feet and move their accounts to another bank or building society, or to one of the new generation of telephone- based banks like First Direct.

Customers do switch banks more often than they used to. But the banking marketplace which for so long was dominated by the Big Five clearing banks, before building societies began to offer full banking services with chequebooks and cash cards, is contracting again.

The biggest visible effect is in the closure of branches and the centralisation of services which used to be available locally.

The banks argue that centralisation is essential to take advantage of technology and streamline their costs, even if the result is massive job losses in the industry which used to be synonymous with job security for life.

This column has no brief to argue that bank and building society staff should be immune from the pressures that have worked their way through manufacturing industry and are now devastating service industries too.

But the banks and building societies should remember that they already have a bad public image, which further dislocation can only aggravate.

You cannot win business by providing remote and error-prone services. The great majority of customers are not yet ready for banking by remote control, and the time may soon come when a friendly face is again recognised as the best sales line of all.

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