Lloyds and RBS bank break ups are 'bad for shareholders'

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Lloyds and RBS bank break ups are 'bad for shareholders'

Customers who bank with Lloyds Banking Group and RBS should look to other institutions to invest their cash, according to the Motley Fool.

Director of the website David Kuo said the selling off of assets by Lloyds Banking Group and Royal Bank of Scotland was inevitable to repay taxpayers following the government bale out earlier this year.

However creating "artificial competition" from the sold-off sections "will be damaging to existing banks at a time when they need to rebuild their balance sheets". He advised customers to look for banks that are not overly reliant on the UK market, such as HSBC and Barclays.

Mr Kuo made his comments following the announcement regarding the sell off of parts of the two government-aided banks.

Under the terms of the measures taken by HM Treasury, Lloyds will no longer be covered by the Assets Protection Scheme (APS) and have to pay money back to the taxpayer. RBS will continue to be involved with APS but has strict terms it has to adhere to. Both banks have to meet government-set targets on pay and lending.

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