Lloyds, which has already been told by European regulators to sell 600 branches, was yesterday told it must sell even more branches to appease competition concerns.
Matt Blakeley, business development manager at said Financial Leeds, said lenders such as Yorkshire Bank could benefit.
“In terms of picking up branch network, that’s one of the areas where the smaller banks struggle,” said Mr Blakeley.
“People like Yorkshire Bank could benefit from that in terms of improving their portfolio.”
Mr Blakeley, who acts on behalf of the Leeds city region’s financial services industry, said branch sales may attract new entrants.
“It would be good to see a new entrant to the market from our region,” he said. “Leeds and the city region is well-placed to accommodate those businesses looking to relocate.”
Other possible buyers could include Virgin Money and Tesco Bank.
Gordon Millward, South and East Yorkshire chairman of the Federation of Small Businesses, said: “With the big four banks holding almost 90 per cent of the market, it is imperative that we see a radical shift which allows greater competition.”
Yorkshire Bank, which has between two and three per cent of the UK retail banking market, declined to comment.