The announcement of Lloyds TSB's £12.2bn takeover of HBOS yesterday will probably mean tens of thousands of job cuts as the two banks are consolidated into one. While HBOS staff were reeling over the suddenness of yesterday's extraordinary deal, there were encouraging words for the 17,000 Scottish members of HBOS's 72,000 strong workforce. There are 7,000 Lloyds TSB workers in Scotland. In outlining details of the acquisition today, Lloyds TSB promised "the management focus is to keep jobs in Scotland."
HBOS, a company registered in Scotland, has its head office in the former Bank of Scotland building on The Mound in Edinburgh, opened in 1806 (pictured). HBOS-LloydsTSB's portfolio of brands includes the Bank of Scotland, Halifax, C&G and Scottish
Widows.
Lloyds TSB said that the enlarged group will continue to use The Mound as its Scottish
headquarters, will hold its Annual General Meeting in
Scotland and will also continue to print Bank of Scotland bank notes.
HBOS, the biggest mortgage lender in the UK with 20% of the market, had been hit hard by the credit crunch with its share price falling like a rock. Under the terms of the deal, HBOS is valued at 232p a share. Shares were 837.63p each a year ago.
The new super-bank will hold a third of the mortgage market in the UK and should find greater financial stability.
“Against the backdrop of the very high levels of volatility our industry is experiencing, the combined group will be one of the strongest players in the UK financial services sector," said Dennis Stevenson, Chairman of HBOS. "We are recommending our shareholders vote for this transaction.”
The merger, following final approval by a majority vote by shareholders, should be completed by the end of 2008 or early 2009.