You might have thought that investors would happily never look at a bank share ever again. Lloyds Banking shares once fetched more than £5 each (77p now) while Royal Bank of Scotland, 370p today, reached (an adjusted) £68 in 2007. You would, of course, be wrong.

So keen are the buyers that Lloyds last week knocked out another £160m-worth of the TSB shares it must sell by the end of next year. This is a mere amuse-bouche ahead of the sale of more of the state’s 25 per cent stake in Lloyds itself, which will come when the Bank of England decides it can afford to restart dividend payments.

Then there is the latest wave of “challenger banks”, starting with Virgin Money, with Aldermore, Shawbrook and Santander UK to follow. They’ve all hit on the brilliant idea of trying to be nice to the customers. Never mind that the last lot of challengers were called building societies, and we know how that ended. As John Quinton, then head of Barclays, remarked at the time: “We’ve got lots of customers that we’ll happily give them.”

Looming in the distant background is RBS itself, four-fifths owned by the taxpayer. Even at today’s depressed price, that stake is worth £33bn, a handy sum for the next government to pretend it can spend.

So there’s no prospect of a stock shortage.But why buy? Banking is not as simple as it looks, but is not as complicated as the big banks made it. Their punishment is a cat’s-cradle of regulations, and the prospect of escalating fines for past sins. As RBS showed recently, the crisis did not induce better behaviour.

The fines will be a drain on profits, but are insignificant compared to the costs of pruning the branches and upgrading the technology. Vince Cable remarked to Alphaville last month that parts of their operating systems are not just years, but decades behind current demands. Unpicking TSB from Lloyds while maintaining 24-hour services was so complex that it may have cost shareholders more than the proceeds from the sale.

All this must be paid for by the interest rate margin, the gap between the derisory rate paid on deposits and the usurious rate charged for advances. Into this gap are stepping the web-based  providers of alternative finance. Peer-to-peer lending is running at £150m a month, The £200m P2P Global is an investment trust standing at a premium to net asset value. These, and many other similar businesses, are currently merely nibbling the edge of the big banks’ smorgasbord. One day, though, they’ll eat their lunch.

On the Blinkx

Life’s never dull at Blinkx, whose “technology leverages speech recognition, text and image analysis to deeply understand the meaning and context of video content to generate improved search relevancy for consumers and a brand safe environment for advertisers.”

This week’s excitement was another profit warning, as the business reached an “inflection point” with “adjusted EBITDA” forecast at zero for the first half-year. Added to the challenge of working out what Blinkx does is that of keeping track of the interests of Subhransu Mukherjee and Suranga Chandratillake, its two principal executives.

A cascade of stock vestings, awards, purchases and sales have helped swell the issued share capital by 10 per cent in a year. The pair’s share sales at over £2 in January look inspired, unlike their purchases at less than half that in February.

Still, those shares cost just 30p today. There’s 17p a share of cash left for inflection, which shows the value of paying executives with scrip instead of (more) money.

They think it’s all over...

but it’s only begun. Referendum relief is fading for many Scottish-registered companies as they realise that the issue is far from settled. The boardroom question is: aside from the (significant) one-off costs of moving south, are there any advantages to staying here?

For the big banks, the answer is obviously No. RBS is run from London and could reincorporate here as National Westminster. Other businesses, faced with a left-leaning administration with tax-raising powers, might consider it prudent to leave quietly.

Ironically, an exodus could help cement the Union, if Quebec’s history is any guide. A wafer-thin majority in 1995 to remain Canadian saw businesses decamping, exposing the costs of independence. Last April, the Parti Quebecois was heavily defeated in Quebec’s general election.

This is my FT column from Saturday

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