HBOS shareholders vote on merger

12 December 2008

Shareholders in HBOS are voting today on the Lloyds TSB takeover deal.

With the deal having already been given the go-ahead by Lloyds TSB shareholders, HBOS shareholders are also expected to vote in favour after a legal challenge to the takeover thrown out by the Competition Appeal Tribunal on Wednesday.

If approved, the deal is set to create a banking Goliath - with around 145,000 staff and 3,000 branches across the UK.

There is, however, still some opposition to the proposed merger, with unions set to protest outside today's shareholder meeting in Birmingham over fears that tens of thousands of workers will lose their jobs.

Unite joint general secretary Derek Simpson warned: "It is vital that HBOS shareholders do not merely consider the financial rewards of a takeover, but the wider social and employment implications."

Losses add up

Meanwhile, HBOS has also revealed it has written off another £3.2 billion in credit crisis related losses.

It attributed the losses to increased pressure on net interest margins due to the cuts in interest rates in the UK, while also warning that, "global market and economic conditions, UK recession and increasing unemployment will continue to present a particularly challenging operating and credit environment."

In its latest trading update, HBOS said bad debts and losses on assets had risen to £8 billion for the calendar year to November - up from £4.8 billion at the end of September, with bad debts on corporate loans almost doubling to £3.3 billion.

The group was however confident that "through the injection of capital and liquidity facilitated by the UK government" it would successfully come through the current economic turmoil.

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