BGN Entrepreneur

With £258 billion worth of deposits as well as 15 million savers, HBOS is the biggest private savings institution in the UK. While almost all banks have been targeted by the concerned shareholders since the bankruptcy of Lehman Brothers, HBOS is less well positioned to manage the deteriorating operating environment than any others, thus has been hit much harder than its peers in the UK.
According to the report of Times, a deal concerning the merger of Lloyds TSB and Halifax Bank of Scotland has just been made. It’s going to create banking giant which will take on a third of the savings and mortgage market in the UK. In order rescue the mortgage giant, the British government needs to temporally waive the existing competition rules.
Earlier today, Mr. Brown had discussed with Sir Victor at a private event hosted by Citigroup in London about the influence of the collapse of Lehman Brothers, the American bank, on HBOS and other British institutions. Later this afternoon, the Bank of England agreed to extend to banks its Special Liquidity Scheme, which allows banks to swap hard-to-trade securities linked to past mortgage lending for easier-to-sell Treasury bills issued by the Government.
After Lehman filed for bankruptcy on Monday, as the HBOS’s investors’ dumped their stock on fears about the bank’s exposure to the mortgage market and its ability to secure funding, the bank’s shares have fallen by as much as 68.7 %. And the Financial Services Authority was forced to issue a statement on the strength of HBOS’s business earlier today to stop a freefall in its share price.
After news concerning the emerging plan of HBOS and Lloyds TSB released this morning, the stock of HBOS rebounded but the shares closed 19% down at 147.1p as the merger are seen as leading to as many as 40,000 job cuts and the closure of at least 1,000 branches.

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