Simon Maughan - on UK Banking, the EU, RBS & Lloyds

11 Oct 2011 Bloomberg

Simon Maughan is Head of Sales and Distribution at MF Global.
Ms Ana Botin is Chief Executive of Santander UK. She is giving evidence at a House of Lords Committee over the final report of the Independent Commission on Banking.


[On the Vickers proposals]

[Is this something that is going to skew the playing field and make it harder for British banks to do business and be competitive?]

Simon Maughan --
The whole pitch of the Vickers report is because we're ringfencing the business that you do in the European zone that you're going to be as competitive as anybody competing next to you. I think ideally Vickers should have recommended purely for the UK so that there would be no risk that somebody would come from outside to take away your business. They simply wouldn't have the on-the-ground staffing and branches [Very important -- control the bank branches and you control the country]. But because of EU Law they have to extend that ringfence out into the Eurozone which increases the chance that the banks are at a slight competitive disadvantage. But the whole thrust of the report is that the businesses that are genuinely international will be outside of the ringfence.


[The UK taxpayer owns 80% of RBS and 40% of Lloyds Banking Group. What does the ICB's recommendation do to the government's timetable to get back its £85bn stake in those banks?]

Neither bank is in a position to resume dividends because of EU regulations around state aid. That's the biggest issue because without an ordinary dividend you are not going to get private investors in the UK subscribing to shares. I don't think the government is going to sell the stake.

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