LloydsTSB and HBOS in merger talks

I suspect The British government did not have the funds to bail out HBOS, it has allowed a massive monopolistic bank to be formed in the UK that will have market dominance that it will be able to set the going rate for mortgage rates. The new HBOS/LLOYDS super bank will handle a 38% of Britains current accounts, this could mean an end to vast majority of us getting free banking. If another bank gets hit by speculators I don't think the government will rush to help out, the pot is looking rather empty. Looks like a bumpy ride for quite a while.

Rob H
 
I see the deals done, i take it thats a crap load more people out of a job. :(


Edit: I have to ask is it only British and American banks in trouble or is most of Europe in the same boat ?
 
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I really would like to know what the managers at these company's where doing for the pass year because to me it seems like they went on holiday and left a fish in charge.

Super Tigers said:
I suspect The British government did not have the funds to bail out HBOS, it has allowed a massive monopolistic bank to be formed in the UK that will have market dominance that it will be able to set the going rate for mortgage rates. The new HBOS/LLOYDS super bank will handle a 38% of Britains current accounts, this could mean an end to vast majority of us getting free banking. If another bank gets hit by speculators I don't think the government will rush to help out, the pot is looking rather empty. Looks like a bumpy ride for quite a while.

Rob H
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I would think the government would have some sort of contract in place and pointers they need to follow, plus government in 10 years time can bring in some nice laws limiting what they are doing because they are a monopoly.

No company is bigger than its people and we are seeing that now.
 
XPE said:
Edit: I have to ask is it only British and American banks in trouble or is most of Europe in the same boat ?
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Pretty much them all, Asia is not just as bad as the losses elsewhere but it's still bad. Russia suspended trading for their market today.
 
Super Tigers said:
I suspect The British government did not have the funds to bail out HBOS, it has allowed a massive monopolistic bank to be formed in the UK that will have market dominance that it will be able to set the going rate for mortgage rates. The new HBOS/LLOYDS super bank will handle a 38% of Britains current accounts, this could mean an end to vast majority of us getting free banking. If another bank gets hit by speculators I don't think the government will rush to help out, the pot is looking rather empty. Looks like a bumpy ride for quite a while.

Rob H
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That's a load of rubbish from the economics point of view, the government easily had the cash to bail out HBOS, it wouldn't even have done much damage to inflation.

The government allowed the merger because it was the best possible option and far better than spending public money bailing out another bank.

It also won't be an end to free banking, that's a ridiculous suggestion in itself.
 
Kitchster_uk said:
It is not healthy for one company to control 1/4 of the UK mortgage market. LLoyds TSB Halfax Bank of Scotland - 4 banks in one, plus the ancillary bits and bats soaked up along the way. Lloyds already have the most Current Accounts, even more now they are together. The worrying thing is, neither of the two strongest banks are even thinking about it (HSBC and Santander). It smacks of desperation by LTSB. HBoS should be broken up imho or in a few years it will be able to exert control over the entire mortgage market.
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Desperation? i think it is opportunism on the part of Llyods they have a unique opportunity to massively expand. And i don't see a problem with them joining the UK still has a lot of banks and building societies. Market share is not a good way to look at competition in the market place.
 
Posty said:
Desperation? i think it is opportunism on the part of Llyods they have a unique opportunity to massively expand. And i don't see a problem with them joining the UK still has a lot of banks and building societies. Market share is not a good way to look at competition in the market place.
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A very good point, while they may have market share, they're both heavily commercially focused, compared to their rivals who make vast amounts of money from their other divisions (or did and will again one day) and are far larger banks.
 
bigredshark said:
Snip.
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But where does it end? Surely Bradford & Bingley are going down - their Moody's rating is down, shares are just 30p and they hold the most BTL mortgages. What happens if "Lloyds TSB BOS Halifax" come in for them? And then there is A&L going to Santander. There are also concerns over the stregth of RBS Natwest. If they were bought by Barclays or HSBC, you're looking at maybe 4 massive financial organisations and a few puny building societies. Not good.

Then there is the effect of the job losses - potential for 1000's of job losses throughout LTSBHBOS and the knock-on effect on the economy and the property that will be left empty. It has to be bad for the economy and surely the way the Fed has sorted AIG would be better than this?
 
Then there is the effect of the job losses - potential for 1000's of job losses throughout LTSBHBOS and the knock-on effect on the economy and the property that will be left empty. It has to be bad for the economy and surely the way the Fed has sorted AIG would be better than this?
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All very true, however, I suspect the government dont have the cash. Just like Meryl Lynch etc in the states have been told to go elsewhere, governments cant afford to bail out banks on a regular basis
 
Super Tigers said:
I suspect The British government did not have the funds to bail out HBOS, it has allowed a massive monopolistic bank to be formed in the UK that will have market dominance that it will be able to set the going rate for mortgage rates. The new HBOS/LLOYDS super bank will handle a 38% of Britains current accounts, this could mean an end to vast majority of us getting free banking. If another bank gets hit by speculators I don't think the government will rush to help out, the pot is looking rather empty. Looks like a bumpy ride for quite a while.

Rob H
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They probably do have the funds but if this particular problem can be solved with the two banks merging I think that is the best solution, not great for competition but if HBOS was to go down that would be far far worse and possibly bigger than Lehman brothers going down. The government right now would most likely rather keep their funds close to them just in case something else goes wrong and need to be bailed out. If they had taken over HBOS they might not have been in the position to help anyone else so this is by far the best solution..
 
bigredshark said:
A very good point, while they may have market share, they're both heavily commercially focused, compared to their rivals who make vast amounts of money from their other divisions (or did and will again one day) and are far larger banks.
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LTSB have more personal customers than any other bank - hardly purely commecially focussed. Yes they look after a lot of businesses, but they will control the mortgage market much more than anyone else. Add to that the total highstreet presence and you've got a massive organisation, with huge frontage and an enormous customer base. I find it concerning that's all.
 
Eurgh, hope they don't. HBOS share dealing is easy at the moment, a merger would be a pain.

We got an email about this at work today and it's just in the very early stages so don't expect anything, if at all, for a while.
 
Jazz said:
They probably do have the funds but if this particular problem can be solved with the two banks merging I think that is the best solution, not great for competition but if HBOS was to go down that would be far far worse and possibly bigger than Lehman brothers going down. The government right now would most likely rather keep their funds close to them just in case something else goes wrong and need to be bailed out. If they had taken over HBOS they might not have been in the position to help anyone else so this is by far the best solution..
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I wonder what the concensus of opinion on HSBC taking over RBS? And what's the consensus on A&L being swallowed by Santander? When will a Bank's UK arm be 'too big?'
 
BENdage said:
All very true, however, I suspect they dont have the cash
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Simply not true they don't have the cash, and it would be a far worse solution to do an AIG style bailout, which was only done after barclays said they wouldn't intervene without a government guarantee.

Yeah the small fry might get snapped up or go bust, it's what happens, they'll be replaced when market conditions improve by newer better companies.

The job losses are just a fact, yeah unemployment will go up a bit, that it hasn't already considering we're basically in a recession is surprising. Lloyds will want to streamline the business and integrate it with time so there will be job losses.

Even if there were only 4 big commercial banks in the UK, whys that a problem, hows it so different from the situation with supermarkets today, a few big players and some bit part charactors. I also don't think it'll happen, RBS is a diverse business which is fundamentally strong and it suits neither HSBC or Barclays as a purchase (none of them are primarily commercial banks, it's just another part of their business). Barclays has problems of it's own too, hence why it wouldn't do that deal with AIG without government guarantees.
 
cymatty said:
Cant see HSBC buying anyone, why potentialy rock a steady balance sheet.
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greed might make them do it, lloyds tsb tripled their share of the uk mortgage market today, not bad for a day at work... I'm sure HSBC could be tempted if an opportunity presented itself
 
Kitchster_uk said:
LTSB have more personal customers than any other bank - hardly purely commecially focussed. Yes they look after a lot of businesses, but they will control the mortgage market much more than anyone else. Add to that the total highstreet presence and you've got a massive organisation, with huge frontage and an enormous customer base. I find it concerning that's all.
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I misspoke, I meant to say retail banking. Either way, taking deposits from businesses and consumers is their focus, which makes them different from RBS/Barclays/HSBC which are much more diverse...
 
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