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What does the HBOS takeover mean?

October 4, 2008 by admin  
Filed under News, News-Banking

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Earlier this week Lloyds TSB, the high street banking giant, announced that it was taking over HBOS in a £12.2 billion rescue operation. The takeover has been rushed through, and officials have said that the government has all but ripped up the rule book with regards to competition so that the takeover could go ahead. Alistair Darling stated: ‘We have made a decision that we will waive the competition requirements in relation to these two banks. That is not going to get revisited,’

There are now concerns over how many jobs will be lost as a result of the takeover, which has created what officials are calling a superbank. It is thought that there could be forty thousand job losses in total, with Lloyds TSB stating that it needs to cut one billion pounds in annual costs until 2011. This will mean that branches around the country will be closed over the next few years.

Officials have also said that the creation of the superbank could change the face of British banking altogether. In a statement Lloyds TSB stated that it was looking at eliminating duplication of branches in the same areas, and also consolidating head office operations.

A senior official stated: ‘Significant cost savings can be made by combining the networks and back offices of Lloyds TSB and HBOS.’

He also said that there would be job losses but that forty thousand losses seemed a bit high, although he provided no figure on expected job losses.

He added: ‘I don’t think there should be the impression that this is a shotgun marriage. This is something that has been looked at for a good long while.’

Tags: Royal Bank of Scotland, cost, one billion pounds, government, annual costs, lloyds tsb, hbos, tsb

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