Lloyds TSB seals merger with HBOS
HBOS
HBOS is the biggest mortgage lender in the UK
Lloyds TSB is to merge with HBOS, creating a banking giant which will hold a third of the UK's savings and mortgage market.
Both firms' boards have agreed to a deal, at a price of 232p per HBOS share following talks.
The deal should calm uncertainty about the strength of Halifax-Bank of Scotland after a run on its shares.
The deal is set to be formally announced on Thursday morning, says BBC business editor Robert Peston.
The talks between the two banks were first reported by the BBC earlier on Wednesday.
Global turmoil
The credit crunch has wreaked havoc on some of the world's financial institutions in recent days.
Fear of a run
Before the news broke, our business editor said the government had opted to push through the tie-up after HBOS voiced concerns that depositors and lenders had begun to withdraw their credit from the bank.
"There were growing concerns in the HBOS boardroom that a climate of fear was being created about its future, that could have led to a funding crisis - or a Northern-Rock style run, on steroids," he added.
HBOS workers give their opinions on merger talks with LLoyds TSB
The deal was negotiated at a very high level, with Prime Minister Gordon Brown telling Lloyds TSB chairman Sir Victor Blank that it would be helpful if Lloyds could end the uncertainty surrounding HBOS by buying it.
"It was not in the government's interest for there to be the faintest risk that it would have another Northern Rock on its hands," our business editor added.
Following the takeover, Lloyds chief executive Eric Daniels is expected to take the helm of the enlarged group. The future of HBOS chief Andy Hornby is unclear.
Competition concerns
Fears had been voiced that the proposed deal would face objections from competition watchdogs over the combined market share the enlarged group would have in mortgages and savings.
It is interesting to see this as an indication of the consolidation into the financial system
Dr Paolo Subacchi, Chatham House
With 20% of the UK mortgage market, HBOS is the country's largest mortgage lender. Lloyds ranks fourth with an 8% share.
On the London market, HBOS shares have seen wild swings during the day on the London market, climbing as high as 220p and falling as low as 88p.
Shares in the lender eventually closed 19% lower, while Lloyds ended unchanged at 279.75p.作者: bill 时间: 2008-9-17 21:18