Although closures and job losses are expected across the combined bank's 3100 branches and 140,000 employees, the group now has a share of more than 25% of the UK mortgage market and an estimated 35% of UK current accounts. It also houses the Cheltenham & Gloucester, Scottish Widows, Sheilas' Wheels and Clerical Medical brands.
The creation of a single dominant player will force others in the sector to alter their positioning, said Paul Gordon, managing director of financial specialist agency Tangible Financial. 'If you can't compete on scale and power, you have to find other ways. We may see niche targeting as other brands look for differentiation.'
Former Lloyds TSB brand and sponsorship director, Alan Gilmour, pointed out that competitors may use public concern to tempt consumers away from the Lloyds TSB and HBOS brands. 'They may use opportunistic marketing, especially smaller brands,' he said. 'I think you'll see more reassuring messages on company websites.'
The takeover may leave a gap in the market for competitive rates, said Anthony Thomson, chief executive of marketing advisory service The Financial Services Forum, who is also launching a chain of boutique high-street banks. 'HBOS has positioned Halifax as a rate leader, but why would Lloyds TSB want to compete with itself? It may provide opportunities for other brands,' he said.
Nonetheless, Thomson was sceptical about brands reacting to the merger with major marketing shifts. 'They have all driven down the same dead end of price competition,' he said.
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