LloydsTSB and HBOS in merger talks
- Thread starter Burnsy2023
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Unlikely, it's both a bad fit in terms of the business (or at least not a good fit) and HSBC are sitting pretty, they're absolutely rock solid, probably the only UK bank who can say that and having got this far I think they're too prudent to risk that now...
HSBC are quite a conservative bank and very solid so I'm sure they won't buy anyone soon. Of course if more banks are bought up or merged it will become a concern but right now those two joining is by far the best result for everyone. Times are tough and it might not be ideal for the long term but for the short term, which is very important because the financial system is getting closer and closer towards a collapse which would be catastrophic, this is the best option. In an ideal world I wouldn't like to see them merge either but this most certainly isn't an ideal world!
As far as I know RBS are pretty solid as well so I wouldn't expect them to run in to any trouble any time soon either. Was reading earlier compared to other banks HBOS relied heavily on borrowing from the market and the rates they were being learnt money at in recent times were getting higher and higher. This in turn led to this panic because when banks need to borrow money at well above market rate that usually means something is wrong and there is a greater risk in lending to them.
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Perfectly summed up.
I don't think anyone would have liked to see this happen, but given the alternative its would seem to be the lesser of 2 evils.
Banks that borrow are the issue, as no one wants to lend anymore. Thats why Northern rock were an early casualty, compared to the amount they lend they dont have many current and savings accounts so their business was based on borrowing money to lend out at a profit. Almost none of the money was theirs and when they couldnt borrow anymore thats when we got the problem. What we are seeing now is the same principle, just with different banks
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Soldato
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Ok, so who's next then? Surely B&B will go belly up? Barclays looks to be ok, but then again, HBoS did 6 months back. RBS are well spread asset-wise but again the share price is weak and volatile at the moment. The building socs are being slowly hoovered by Nationwide when they get into bother but that's not really a worry unless there is a stellar shift in Nationwide's policy and they de-mutualise, which is highly unlikely.
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That's part of the upside of this deal, it should calm things down. They might even start lending to each other without so much suspicion
HBOS didn't just look OK 6 months ago, they were just fine 6 hours ago financially, it's just confidence that did for them. The biggest banks are pretty safe, HSBC are really rock solid, Barclays have taken huge losses from the credit crunch but are big and diverse and lacking in suitors anyway, RBS are smaller but much the same story, diverse, not an obvious buy for anyone.
Unless something goes really wrong I think they should all survive now. The downside is, rescue options are thin on the ground. We can safely say HSBC will be fine but if Barclays or RBS got into trouble it's difficult to see who'd fancy a merger so they might end up going to the government...
Deposits is only one part of the overall banking proposition, but there is definitely a push towards this given the drying up of the liquidity markets. Corporate lending is very important to both banks, as is an overall suite of corporate offerings to provide the most profitable service. Insurance and Investment is another big area of focus, and operates almost independently of the retail and business divisions of HBOS.
EDIT - personally I'm kind of bricking it about my job, as I do back-office support for HBOS loans. Lloyds have a team doing exactly the same as I do, and there's no point in doubling your work up...
RBS are the second biggest banking group in the UK & 6th in the world - I doubt very much that HSBC is going to attempt to swallow them up
It's not hard to fathom - HSBC is the UK's biggest and the worlds 4th biggest by assets. I think RBS is down the list at 11th but these may be old figures.
Given the kicking RBS have taken over the last two years it could be done, but as already mentioned HSBS arn't that type of bank.
Soldato
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in that case im gonna go -2000 into my overdraft incase madness occurs
Soldato
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can someone confirm this please, as im clueless on this stuff.
if i have 100 hbos shares does that mean i now have 83 TSB shares? or will i recieve 232p for every share with no choice.
if i have 100 hbos shares does that mean i now have 83 TSB shares? or will i recieve 232p for every share with no choice.
You would receive Lloyds shares. There is no cash alternative in this deal.
The 232pence is just a representative value of the exchange offer based on the closing price of Lloyds shares yesterday of £2.798, so £2.798*0.83=£2.32.
You'll wanna hurry up if you do want to buy some HBOS shares, the price is up 30 odd percent already since start of trading.
Soldato
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so if i have 100 hbos shares i now have?
83 Lloyds shares.
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was talking to HBOS family member last night
They are expecting it to take 3-4 years to fully complete, after all the Halifax and RBOS took 2-3 years
170 High level HBOS employees compared to 700 Lylods so there shouldn't be much high level job losses, as for joe public dunno
They are joking in the office calling it TOSBOS (though I don't know how they arrived at that)
They are expecting it to take 3-4 years to fully complete, after all the Halifax and RBOS took 2-3 years
170 High level HBOS employees compared to 700 Lylods so there shouldn't be much high level job losses, as for joe public dunno
They are joking in the office calling it TOSBOS (though I don't know how they arrived at that)
According to Dec 07 figures, RBS are number 1 in the world and HSBC 3rd in terms of total assets.
RBS = $3,807,892m
HSBC = $2,354,266m
As for Strength though, HSBC have a tier 1 capital of approx $104bn (1st)whereas RBS have $89bn (3rd)
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