Lex Autolease merger moves closer
05 November 2008
Author: Hugh Hunston
Lex Lloyds TSB logos
The creation of a leasing super group involving Lex and Lloyds TSB has taken a major step forward with the clearance by business secretary Lord Mandelson of the merger between their two parent banks, Lloyds TSB and HBOS .
Lord Mandelson said preserving the stability of the financial system outweighed any potential anti-competitive effects so there was no need to refer the deal to the Competition Commission.
Combining the two financial institutions will create a bank controlling about 25% of British customers' personal bank accounts and 28% of the mortgage market.
Normally it would have raised competition issues and concerns, which have already been expressed by the Office of Fair Trading. But the UK banking system's stability was deemed by the British government, to transcend normal competition rules which were relaxed.
Both the Scottish National Party and the Liberal Democrats in Scotland have called for the deal to be re-examined to ascertain if HBOS could survive independently under the recapitalisation scheme.
Lloyds expects to complete the takeover of HBOS by January after a shareholder vote later this month and make up to £1.5 billion in savings, 50% more than announced earlier, with the likely cut of thousands of jobs across various overlapping divisions.