Lloyds TSB and HBOS to merge

ShelfStacker_3

No, they're calling it "Lloyds TSB". Halifax has a pretty crap rep among many, they'd be insane to want to adopt the brand.

Like others have said, this isn't a merger, it's a government-instructed takeover, because with the run on HBOS' shares they would probably have had a tough time had something not happened, and with them having a colossal share of both savings and mortgages in this country, nobody could afford them going under.

What worries me is that Lloyds directly got the tap from the government. No bidding, no contest; just "Hello, would you like to buy Halifax? The Competition Commission can go f**k themselves, yeah... sorted." Why Lloyds, specifically? They're neither the biggest nor the best placed - in fact, the direct and brazen bypassing of the laws on competition is very concerning.

bert&ernie

What I want to know is how LTSB are going to fund this "takeover". Even at the rumored 200p per share, I doubt they can raise this sort of cash. I think the offer, when it comes, will need to include a large proportion of equity in the merged group.

Its only a takeover in the sense that LTSB have the larger market capitalisation - largely due to the massive run on HBOS stock. In many ways, HBOS is the "larger" bank.

Make no mistake, this is by no means a clear win for anybody. There is significant risk to the shareholders of LTSB. HBOS shareholders may well think that the bank is undervalued. Staff at both banks are almost certain to suffer redundancies - its foolish to think that LTSB staff will get off any lighter than HBOS. Customers too can expect to lose out big time because of the drastic effect on the competition in the retail banking space.

To be honest, I think the whole deal stinks to high heaven for the reasons outlined by ShelfStacker above. Unfortunately, it may well prove to be the least-worst option given the drastic crisis of confidence that has unfolded.

mrposhman

Why would HBOS shareholders deem the bank to be overvalued?

They must surely wait to find out how many of their assets (most likely trades with the now defunct Lehman Bros) have to be written off, imo this would have a MASSIVE impact to their balance sheet.

catz747

Our savings are in Halifax accounts (ISAs), are they safe?

ShelfStacker_3

catz747 wrote: »

Our savings are in Halifax accounts (ISAs), are they safe?

For now, yes. If worst comes to worst, you're still under the FSCS.

catz747

Thanks, So, do we need to do anything? Or how do we know when we need to do something?

bert&ernie

mrposhman wrote: »

Why would HBOS shareholders deem the bank to be overvalued?

They must surely wait to find out how many of their assets (most likely trades with the now defunct Lehman Bros) have to be written off, imo this would have a MASSIVE impact to their balance sheet.

HBOS shareholders may view the bank as undervalued because the deal they are going to be offered is a fait accompli. Once the news broke that HBOS was in negotiations with LTSB, this became the only option as backing out would have reduced confidence even further.

We'll have to wait and see what the offer is, but it looks like it will be forced through regardless. It will be interesting to see what HBOS's 2 million+ private investors make of it though.

TiggsJ

Great that means lloyds bank charges hiked up to pay for this...... Methinks its time to stash the cash under the floorboards or under the matress like the old days, if none of us have bank accounts then they're stuck, if I could have one wish it would be for everyone in the UK to withdraw all their money out of the banks the same day !
BANKS - NABS K ( steals thousands eh !)

Silicon

ShelfStacker wrote: »

Why Lloyds, specifically? They're neither the biggest nor the best placed - in fact, the direct and brazen bypassing of the laws on competition is very concerning.

Because, of all the high st banks, Lloyds are the least exposed to the toxic rubbish that's out there.

They've traditionally been cautious and their share price suffered when all the other banks were playing games, only to recover slightly when the idiots* that work in the markets realised it wasn't such a bad idea after all.

*not all but plenty of them are...

squirrel1969

I've had an arranged overdraft facility of £3,000 on my Halifax current account since opening it some five years ago. I rarely dipped into it until this time last year when I moved away from London for job reasons, without moving expenses paid by my employer, with a non-London salary, and still with a home to pay for in London. So I've been deep into this overdraft ever since - indeed, my salary barely covers the cost of it all so I always end up £3,000 OD at the end of the month.

So, my question is: should I open another current account with another bank pronto and get my salary paid into that? Obviously I'd pay off the overdraft - but I'm petrified that the Lloyds/HBOS monster will seize my income as recompense. In fact, they'd have to seize almost 2 months' salary to cover it.

Any advice much appreciated!:beer: