Lloyds TSB Acquires HBOS

Posted on September 18th, 2008 by Jay

Lloyds TSB have today confirmed a takeover of troubled UK bank HBOS (Halifax Bank of Scotland). HBOS, who’s shares have taken a real hammering in recent weeks were in danger of going under when the Lloyds TSB acquisition was announced. The new combined bank willown a third of all mortgage business in the UK and would normally have been the focus of the Monoplies Commission due to the extreme market share however, due to the dangers faced by HBOS, the government has taken the unprecedented step of by-passing the rules and endorsing the deal directly. The FSA (Financial Services Authority) has released a statement claiming that the merger would “enhance stability within financial markets and improve confidence among customers and investors in the UK financial sector”.

However, the short term gains must be weighed against the losses - namely the unconfirmed report that up to 40,000 UK based employees could lose their jobs. Given that Lloyds TSB are the company taking over HBOS, it would seem likely that the brunt of any job losses would be felt on the HBOS side, as call centres and Head Office functions are merged. HBOS job losses would affect Scotland in particular, with the HBOS group’s head office based in Edinburgh.