Lloyds HBOS- Competition laws suspened allow illegal merger

http://news.bbc.co.uk/2/hi/business/7622380.stm

Competition fears

BBC business editor Robert Peston said the government had opted to push through the Lloyds TSB-HBOS tie-up after HBOS voiced concerns that depositors and lenders had begun to withdraw their credit from the bank.

Earlier Chancellor Alistair Darling said the government would allow the HBOS-Lloyds TSB deal because financial stability "must trump" competition fears.

But he denied that the authorities had rushed through the transaction.

"It didn't just suddenly happen," he told the BBC.

City watchdog, the Financial Services Authority (FSA) welcomed the merger saying it would "enhance stability within financial markets and improve confidence among customers and investors in the UK financial sector".

Concerns about HBOS's security were so great that even the prime minister was involved in pushing through the deal, our business editor said.

"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 said.


The future of thousands of jobs is in the balance in the wake of Lloyds TSB's £12.2bn takeover of Halifax Bank of Scotland (HBOS).

While Lloyds dismissed claims that up to 40,000 jobs faced the axe as "ridiculous", it refused to rule out compulsory redundancies.

The takeover will lead to cost savings of more than £1bn, Lloyds added.

Meanwhile the global markets were calmer after central banks pumped billions of dollars in extra funds.

The UK government also said it is "determined" to ensure the stability of the financial system and protect savers.

Gordon Brown pledged to "do everything to protect depositors in Britain, who need to have confidence in the banking system".

The takeover by Lloyds TSB values shares in HBOS at 232p each.

By close of trade in London on Thursday, when the deal was announced, shares in HBOS closed up 17%, at 172p, while Lloyds shares shed 17.7% to 253p.

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• crash
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• job
• loss
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• crunch
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• cas

[dcamaggots]

Yep. You can bet that Lloyds TSB WILL cut jobs if the merger goes through, and you can bet that thousands of customers will jump ship.

That's what happened when Barclays took over Woolwich - thousands of Woolwich customers shut their accounts down because Barclays fumbled the whole thing. And Barclays are a bank that sometimes knows what its doing. Which is more than can be said for Lloyds.