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• Lloyds already ordered to sell 600 branches by EU • All banks should ring-fence savings operations • RBS estimates benefits of ‘universal’ banking at up to £4.8bn Lloyds Banking Group should sell more branches to reduce its dominance on the high street and all banks should be forced to ring-fence their savings operations from the rest of the business under proposals unveiled on Monday by the independent commission on banking. Lloyds, created by Labour during the 2008 financial crisis to save HBOS, is already being forced to sell 600 branches to appease EU regulators. The independent banking commission, chaired by Sir John Vickers, is now suggesting that even more be sold off to tackle its 30% share of current accounts, 24% of mortgages – more than any other bank – and a 23% share of small business banking, second only to RBS. Lloyds was the first bank to respond to the commission’s much-anticipated report. “We are currently assessing the full implications of the report and will provide a further update to the market once we have had the opportunity to review the report in detail,” Lloyds said. The major banks will also be affected by the commission’s propositions that they be forced to separate their savings business from the rest of their operations to reduce the need for another taxpayer bailout of the system. This means that so-called universal banks will argue that their costs of doing business will rise. Vickers and his four commissioners are also recommending that these ring-fenced operations hold more capital than at present – suggesting a 10% core tier one ratio. RBS is the only bank to have made a public estimate about the benefits of being a universal bank – putting it at between £3.5bn and £4.8bn annually – and analysts at Goldman Sachs believe Barclays has most to lose. Lloyds may fight hard against any demands that it is forced to sell off even more branches. The former chief executive Eric Daniels told the Financial Times this year: “One of the things that characterises most modern governments is that when you make an agreement with the state, it’s an agreement with the state independent of which political party is in power. There was a sentiment [then] that financial stability was more important and that the issue of competition took second place. As a result of that, the secretary of state signed off the deal. That is a matter of public record.” Banking Barclays HSBC Lloyds Banking Group Royal Bank of Scotland Jill Treanor guardian.co.uk