LONDON: Britain’s big banks could be broken up after the country’s new competition watchdog set out plans for an 18-month investigation into services for small business customers and personal accounts because of a lack of competition.

The Competition and Markets Authority said banks have not done enough to meet the needs of retail customers or small and medium-sized businesses, such as making it easier to switch banks or providing clear information on fees.

The review will mark the latest attempt to open up banking in Britain to more competition and is also likely keep the banks in the political spotlight ahead of next year’s election.

The CMA, which became Britain’s new competition watchdog in April, has the power to order a break up of banks considered too dominant, as well as so-called behavioral remedies, such as improving information given to customers.

State-backed Lloyds Banking Group and Royal Bank of Scotland, the biggest banks for both personal accounts and business banking, are most at risk of being told to cut their market share, potentially by selling more branches.

“Our studies have found that despite some positive developments, significant competition concerns remain which mean that customers may not be getting consistently good service and value from their banks,” Alex Chisholm, CMA chief executive, said. A full investigation had been widely expected. It would take about 18 months, so it would be early to mid-2016 before any remedies were proposed.

Britain’s big four banks, which also include Barclays and HSBC, hold 77 percent of the 65 million personal current accounts in Britain, and have 85 percent of the 3.5 million business current accounts and provide nine out of every 10 business loans, the CMA said.

Current or personal accounts brought in about 8.1 billion pounds ($13.8 billion) of revenue last year for the banks — or about 125 pounds per customer. Revenue from small business accounts was well over 2 billion pounds,the watchdog said.

Shares in RBS fell 1.7 percent by 1100 GMT, the weakest stock in the European bank index. Lloyds shares fell 0.7 percent and Barclays and HSBC were both weaker, broadly in line with the bank sector.

Lloyds and RBS are already being forced to sell more than 900 branches between them by European regulators.

Analysts said these two were unlikely to have to shed much more of their networks, but they could have to cut into pockets of strength. That could include business banking in Scotland, where RBS has 39 percent of the market and Lloyds 30 percent.

An investigation may also raise the threat of more political interference ahead of a general election due by May.

“A break up thesis will definitely make its way into political manifestos and news flow is likely to remain volatile for the banks in this space,” Bernstein analyst Chirantan Barua, said.

Ed Balls, shadow finance minister for the opposition Labour Party, wants to impose market share caps on banks and welcomed a possible full industry investigation. —Arabnews