Lloyds TSB takes over HBOS

Published 18th Sep 2008

Lloyds TSB confirmed this morning that it is paying £12.2bn to take over HBOS in a "landmark day in financial services history" that is intended to create one of the strongest banks in the UK but cause thousands of job losses and branch closures.

In an attempt to calm concerns about the health of the banking system, the Financial Services Authority made it clear that it believed the deal would "enhance finance stability".

In a statement rushed out immediately after the 7am merger annnouncement, the FSA said it was "satisfied that HBOS is a well-capitalised bank that continues to fund its business in a satisfactory way. The announcement of the proposed merger with Lloyds TSB is a welcome move as it is likely to enhance stability within financial markets and improve confidence among customers and investors in the UK financial sector."

The secretary of state for business, John Hutton, confirmed that the government would override competition law on public interest grounds to "ensure the stability of the UK financial system".

Source: ' times '

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