Two of Britain's largest lenders agree merger

Posted: 18 Sep 2008 10:58:02 GMT

Britain's largest mortgage lender HBOS, which operates Halifax and the Bank of Scotland, has reached an agreement to be acquired by Lloyds TSB.

The beleaguered bank saw its shares tumble in the wake of the Lehman Brothers failure, due to stock market speculation, and it is believed that the government encouraged Lloyds TSB to step in with a merger offer.

Commenting on the acquisition, Sir Victor Blank, chairman of Lloyds TSB, said: "this will be a unique opportunity to accelerate and extend our strategy and create the UK's leading financial services group."

If the merger does go ahead, consumer website Moneyfacts.co.uk expects that major brands such as Halifax and Cheltenham & Gloucester will continue to operate, although rates and terms on their products could change.

According to the BBC, the 'superbank' will have more than 38 million British customers, and an estimated 30 per cent of the mortgage market.

Meanwhile, the government announced that it would allow the takeover to bypass competition laws, should it go ahead, in order to protect the financial industry from another Northern Rock-style collapse.


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