Yet another thousands of job losses in UK are in the making as HBOS, the operator of Bank of Scotland, is being acquired by Lloyds TSB that will rescue it from bankruptcy.
The two are involved in a £12.2 billion government-brokered deal, which will see the possibility of the creation of a new name for the merged companies.
The Central Bank of England will play a key role in extending an emergency lending mechanism that will ease Lloyds in completing the financial related processes.
In the past weeks, the share price of HBOS has been plummeting by some 50% of value amid the financial struggles and was heading for the same fate as Lehman Brothers, which filed for bankruptcy protection last week. It has been struggling with the mortgage crisis and coping up with the volatile wholesale funding.
The acquisition by Lloyds will also produce a “super bank” that combines customers from both entities, adding up to close to 40 million customers worldwide, and with over £1 trillion of assets. The new company will control nearly 30% of the nationwide mortgage market.
HBOS is one of the biggest mortgage lenders in the UK with its main headquarter located in Edinburgh, Scotland. It was formed out of a merger between Halifax PLC and the Bank of Scotland. Lloyds, on the other hand, is one of the oldest banks in England is presently the 5th largest bank in the UK, with main operation in Europe, United States, Middle East and Asia. With the merger, some analysts said that up to 40,000 people may lose their jobs in the upcoming few weeks.