HBOS shareholders approve merger with Lloyds TSB

by Gill Montia

Story link: HBOS shareholders approve merger with Lloyds TSB

HBOS shareholders have voted in favour of a merger with Lloyds TSB.

The all-share deal, which was brokered by the Government in September, has already been agreed by Lloyds TSB shareholders, 95.98% of whom voted in favour of the takeover.

In the case of HBOS, investors are also enthusiastic, with a significant majority casting their votes in favour of a merger.

Hours before the vote, HBOS revealed that bad debts and write downs on assets had increased to £8 billion for the first 11 months of the year, with £3.2 billion accruing since the end of September.

In addition, the group’s impairment charge for mortgage arrears has risen more than threefold since June (to £700 million for the year so far) while bad debts on corporate loans increased to £3.3 billion.

The news prompted shares in both banks to fall sharply, by 22% for HBOS and almost 17% for Lloyds TSB.

The combined banks will operate under the Lloyds Banking Group umbrella and for the time being the Bank of Scotland and Halifax brands will be retained. However, large scale job losses are anticipated.