Millions of bank customers to be forcibly moved

The break-up of Lloyds and Royal Bank of Scotland, hailed last week as giving greater choice, will instead compel more than five million customers to change bank. People will be forced to switch to a new bank, probably a newcomer to UK banking they may not have heard of.

The European Commission ordered the two banks to sell nearly 1,000 branches as a penalty for accepting state aid. All those branches' customers and accounts will be included in the sales, which will also affect savers and borrowers with Lloyds' Cheltenham & Gloucester and Halifax brands.

About 3.4 million Lloyds group current-account holders plus up to two million mortgage borrowers will be hit as well as 1.7 million RBS customers.

The Chancellor, Alistair Darling, announced the break-up last week, saying it would create new banks. "This will increase diversity and competition in the banking sector, giving more choice and a better service," he said.

Northern Rock savers and some borrowers will see their bank sold but will remain with that company. However, many Lloyds and Royal customers will find their bank given a new name and owner.