HBOS Plc
Wednesday, September 17, 2008 6:07
Halifax Bank of Scotland (HBOS plc) is a banking and insurance group in the United Kingdom. It was formed by the merger of the Halifax plc and the Governor and Company of the Bank of Scotland.
Now, the group is a public limited company listed on the London Stock Exchange. It is the holding company for Bank of Scotland plc, which operates the Bank of Scotland and Halifax brands; HBOS Australia, owner of BankWest; as well as HBOS Insurance & Investment Group Limited. The corporate headquarters of the group are in Edinburgh, while the operational headquarters are based in Halifax.
Funding more mortgages than its rivals by borrowing money rather than from savers’ deposits, HBOS is a big British bank exposed most to the housing market. As a result, it got more hurt in the recent credit crunch. As all banks are based on confidence, HBOS is getting into great trouble. Due to the collapse of Lehman Brothers and the fall of bank’s share price by 50% in two days, panicked investors are busy dumping their stock now. Lloyds TSB is in talks to buy shares of HBOS. It’s not surprising that HBOS’s 15 million depositors are now quite worried about their savings.
But it is inconceivable that the Government would allow ordinary savers to be left out of pocket in the event of a problem at any big British bank. So the savers of HBOS should sleep easy, while the shareholders should expect the bumpy ride to continue.
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