Lloyds and HBOS merger confirmed
18 September 2008
Lloyds TSB is to merge with mortgage lender HBOS to save the bank from collapse, it has been reported.
The move will create a "banking giant" with 22 million customers holding almost a third of the entire UK savings and mortgage market, reports the BBC.
Wednesday was a dramatic day for HBOS with its shares at one point up to 220p and at another dropping in value to 88p.
Prime Minister Gordon Brown was involved in the negotiations of the deal and he apparently told Lloyds TSB Chairman Sir Victor Blank that it would be "helpful" for them to end the uncertainty around HBOS's future.
Need to Remortgage? Quotes & Advice
A deal such as this would usually be blocked by competition laws in the UK relating to market share but a national interest clause has overridden them in this instance, due to the fact that the collapse of HBOS would have such a negative impact on Britain.
In related news, the BBC has reassured people with mortgages with either firm saying the merger will "hardly affect them at all". The broadcaster points out that a merger should not affect the interest rate paid on a mortgage as this is set by the Bank of England.
Quick Guide: HBOS, Lehman, AIG and all that
