HBOS & Lloyds TSB in merger talks
19 September 2008
HBOS (Halifax Bank of Scotland) and Lloyds TSB have announced that they are in talks about a possible merger worth £30bn.
The move would end uncertainty about the strength of HBOS (amongst others in the credit and loans markets), following a run on its shares in the past week.
It comes as the effects of the credit crunch begin to hit the economy deeply, with US investment bank Lehman Brothers filing for bankruptcy and insurance company AIG receiving an $85bn rescue package from the US Treasury.
A spokesperson for Think Money said: “If the merger goes ahead, those involved in the loans market might breathe a sigh of relief.
“The run on HBOS’ shares, left alone, could have effectively ruled out any other institutions doing business with them, and that would have caused a further limiting of liquidity in the credit market. Hopefully, this move will limit any further damage.”
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