ABC Money
Home

 Lloyds Bank in merger talks with top mortgage lender - Summary


Published :
Wed, 17 Sep 2008 06:22
By : own author
Print this Story


AddThis Social Bookmark Button

London - A potentially giant banking merger loomed in Britain Wednesday as top mortgage lender HBOS confirmed it was in "advanced talks" with Lloyds TSB, the country's fourth-biggest bank. Confirmation of the merger talks, coming after days of HBOS shares being buffeted in the aftermath of the collapse of US bank Lehman Brothers, was met with surprise in London's financial district.

Analysts raised competition issues and said the move smacked of panic, as it emerged that the government and the Financial Services Authority (FSA) were backing the merger talks amid concerns over a possible run on HBOS - or Halifax Bank of Scotland.

"They are afraid that HBOS could become Northern Rock mark 2," City analyst Will Hutton told the BBC in a reference to last year's collapse of British mortgage lender Northern Rock.

Reports said Prime Minister Gordon Brown had given his personal backing to a tie-up, and the government would legislate to "overcome any competition obstacles."

The share price of HBOS, which covers 25 per cent of the mortgage market in Britain, fell by up to 50 per cent on the stock market this week, with speculators targeting its exposure to the effects of falling property prices, rising home repossessions and a generally weakening economy.

Analysts said they were puzzled by the Lloyds TSB move which could increase the bank's exposure to the volatile mortgage market.

If a merger is agreed it would create a bank with a market value of 30 billion pounds (53 billion dollars), by far the biggest on the British High Street.

It would have 3,000 branches, 38 million customers and 142,000 employees, and thus hold a dominant position in the mortgage and savings market.

Meanwhile, it was was confirmed Wednesday that Britain's Barclays bank has agreed to buy some of the core assets of Lehman Brothers in the US for 1 billion pounds (1.75 billion dollars).

Barclays, Britain's third-biggest bank, had bought Lehman's North American investment banking and trading unit for 250 million dollars, and paid 1.5 billion dollars for its New York headquarters and two data centres following negotiations in New York.

The deal, regarded by Barclays as the "opportunity of a lifetime," followed the bank's withdrawal last weekend from negotiations on a rescue package for Lehman Brothers.

It is understood to aid the rescue of 10,000 jobs at Lehman Brothers in the US, but none of the 5,000 at risk at the stricken bank's subsidiary in Britain.


Share on



Comment on this Article
Comment:
Title:
Name:
Please Enter
 
Here
  

 Search News

 Look For
Business
Credit cards
Finance
Loans
Money
Mortgages

 
 Stock Quotes *
SYMBOL
LAST
CHANGE
DOW JONES
10340.69
-107.24 ( -1.03 %)
NASDAQ
2792.28
22.57 ( 0.81 %)
FTSE 100
5741.15
38.78 ( 0.68 %)

SYMBOL ( 2012-01-19 )
LAST
CHANGE
STANDARD CHARTERED ( 11:35am )
1559.00
70.00 ( 4.76 %)
WOLSELEY PLC ( 11:35am )
2250.00
70.00 ( 3.20 %)
CARNIVAL ( 11:35am )
2017.00
46.00 ( 2.42 %)
LAND SECURITIES GROUP ( 11:35am )
679.50
36.50 ( 5.63 %)
WHITBREAD ( 11:35am )
1662.99
33.99 ( 2.09 %)

SYMBOL ( 2012-01-19 )
LAST
CHANGE
3M COMPANY ( 12:34pm )
85.78
0.71 ( 0.83 %)
BOEING CO ( 12:34pm )
75.70
0.64 ( 0.85 %)
JP MORGAN CHASE CO ( 12:34pm )
37.03
0.49 ( 1.33 %)
IBM ( 12:34pm )
181.50
0.43 ( 0.24 %)
WAL MART STORES ( 12:34pm )
60.44
0.43 ( 0.72 %)

SYMBOL ( 2012-01-19 )
LAST
CHANGE
F5 NETWORKS INC ( 12:11pm )
122.38
13.92 ( 11.80 %)
ICO GLOBAL COMM CL A ( 8:01pm )
99999999.99
9.37 ( 366.02 %)
PRICELINECOM INC ( 12:23pm )
525.40
6.57 ( 1.26 %)
AMAZONCOM INC ( 12:04pm )
195.65
6.21 ( 3.25 %)
MILLICOM INTERNATIONAL CELLULAR SA ( 4:00pm )
110.18
4.82 ( 4.43 %)

Gainers & Losers
Dow Jones
Euro Stoxx 50
FTSE 100
FTSE 250
FTSE AIM
FTSE ALL
Nasdaq

 Portfolio Manager

You must log in to access this area of the site. If you are not a registered user click here to sign up for instant access!


 Finance Explained

Money making ideas

Save money

Money management
Savings accounts
Investing money
Share dealing
Stock broker
Forex currency trading
Pension plans
Functions of Money

(c) 2007 viploan.co.uk, All Rights Reserved
*viploan.co.uk does not guarantee the accuracy of any share prices or stock quotations displayed. These are not real time quotes; all are delayed by at least twenty minutes and are for information purposes only.