David Prosser: Will Treasury hat-trick get a result?

Outlook: Tesco has already hinted that it might consider charging for current accounts

You can see what the folk at the Treasury were thinking. Having spent so many billions bailing out Britain's banks – and with no decent return on their money in sight for taxpayers – presenting today's shake-up of Royal Bank of Scotland and Lloyds as a feast for competition-starved consumers is the Government's best hope to date of spinning a positive story out of the financial crisis.

So it is that the Treasury is championing its insistence that at least three new banks be created from the assets of RBS, Lloyds and Northern Rock as a victory for the sector's customers. These three new institutions will force the banking establishment to finally begin offering its customers a better deal, we are told.

Will they really? A quick check of Moneyfacts, the personal finance industry bible, reveals that more than 30 different banks already offer current account services. The list of mortgage lenders is more than twice as long as that. In fact, for every banking product you care to mention – from credit cards to loans to savings accounts – there are already reams of providers. Why should three more, in any of these markets, suddenly produce real competition that delivers tangible benefits for customers?

Such competition is certainly needed. The industry's claim that it offers better-value banking products than any of its rivals on the Continent – that trusty old canard of free banking for those in credit spearheads that argument – has repeatedly been discredited. Why else do you think all those foreign banks are so keen to make acquisitions in the UK?

As for free banking, it's true that unlike in the US, say, Britain's current account providers do not charge customers who stay in credit for services such as writing cheques or making cash withdrawals. But have a look at the typical rate of interest paid by a current account over the past five to 10 years – rarely more than 0.25 per cent annually – and then examine the banks' claim that they are not making a turn from their customers. And as for what the banks have been earning on customers slipping into overdraft, authorised or otherwise – probably best not to go there.

Certainly, the new entrants to the banking market we saw before the financial crisis began did not produce the competition windfall that Alistair Darling now believes his trio of debutants will create. Look at Standard Life Bank, for example, launched in the Nineties as an innovative, consumer-friendly alternative to the high street big boys. A decade on, having made only a minimal impact in niche markets, the venture was last week sold – to Barclays Bank.

Alternatively, take the foreign entrants to the UK banking market. Santander and National Australia Bank are indeed doing a better job of running the banks they have acquired than their previous managements (not difficult in several cases), but their effect on competition has been negligible. The biggest banks' share of the current account sector, for example, has barely moved.

It may be that the new entrants that Mr Darling hopes are coming this time will do a better job. Tesco and Virgin, in particular, have built their success on consumer-focused business models, so perhaps they will succeed where others have failed.

It is possible. Still, Tesco has already hinted that it might consider charging for current accounts – it would concentrate on attracting customers through a compelling Clubcard deal instead – while Virgin's record in financial services is not especially reassuring. Various ventures have been and gone, but none have broken the mould, or changed the way that established players operate.

There are a handful of financial-sector businesses out there with something genuinely new to offer. Think of Zopa, the peer-to-peer lending service, for example, or even some of the ethical and socially responsible providers. These, however, operate at the margins, while the new entrants we will see following the mini break-up of RBS and Lloyds are almost certain to follow the same model already in existence. Anyone expecting a brave new world of banking competition is likely to be disappointed.