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Northern Rock benefits from HBOS takeover

October 8, 2008 by admin  
Filed under News, News-Banking

1 Comment

This time last year Northern Rock was fast becoming known as one of the first major victims of the global credit crunch in the UK, with rumours that it was on the verge of collapse and savers rushing to withdraw billions of pounds in savings within a few days. The bank became the victim of the first run on a British bank in nearly one hundred and fifty years. Earlier this year Northern Rock was nationalised as a result of the problems that it had experienced.

However, over the space of a year a great number of changes have taken place in the financial sector, and it was recently announced that Lloyds TSB was buying out HBOS. This sparked immediate fears amongst savers with regards to the safety of their money, with many fearful that the deal would fall through and result in a collapse. As a result it is claimed that many savers have reduced their deposits with HBOS to below the £35,000 safety net that is provided by the Financial Services Authority.

Reports now claim that the main beneficiary of the money that has been taken out of HBOS by savers has been previously stricken bank Northern Rock. This is because of the increased guarantee that the now government owned bank offers to savers with regards to the security of their money – this level of guarantee is usually only offered to savers with National Savings and Investments. Whilst a number of financial institutions have reported increased deposits as a result of the HBOS takeover, officials claim that Northern Rock has been the one to benefit most of all.

One official from Northern Rock said: ‘We’ve been busy and the feedback we’re getting from these new depositors is that they’re seeking safety and the elimination of uncertainty’. However, officials from HBOS have recently said that they had ‘not received any data to suggest a significant increase in the level of withdrawals’.

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Comments

One Response to “Northern Rock benefits from HBOS takeover”
  1. Truth Teller says:
    October 23, 2008 at 12:21 am

    Did Gordon Brown harm HBOS as it is Scotland’s Bank?

    The problems caused by greed in the banking industry were predicted well before the recent credit crunch. The tax payer has been forced to bail out banks in countries that the Government has not acted fast and effectively enough. As RBS and HBOS are the largest banks in the United Kingdom it is obvious that the lack of Governmental regulations within the Banking Industry would hit these banks hardest. As soon as HBOS shares dipped Gordon Brown announced a merger with Lloyds TSB making a super bank, a merger that breaks the merger regulations. The announcement of this possible merger caused shares in both banks to tumble as money markets do not want a monopoly in UK banking.

    The question is, did Gordon Brown deliberately for political reasons announce a merger that would cripple HBOS a Independent Scottish Bank to make it disappear to make Scot’s question Independence. The fact that, Westminster has announced, that if the merger does not go ahead the 13 Billion taxpayer bail out for HBOS will be withdrawn, proves the underhand Unionist Politics of Westminster. (13 Billion is only one year of Scotland’s oil money) http://www.oilofscotland.org

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