Black Horse gallops to Howard's rescue

After months of torture, under continual share price pressure and doubts about its' liquidity, HBOS has finally capitulated and agreed to a friendly take-over by Lloyds TSB. The speed of the deal has shocked many, but it was essential - already the "man on the street" had begun to read worrying stories about HBOS, with the next step being to withdraw their money, thereby kicking off a run on the Bank.

The Govt has already confirmed this morning that it will set aside competition rules to allow the deal to go through - the combined entity will control a third of the retail banking market [deposits and mortgages]. It will also begin with 140,000 staff, but inevitably there will be a large shake-out of staff as duplicate functions are removed. Obvious examples
It looks likely that the HBOS name will disappear and the combined entity will trade as LloydsTSB. Some of the brand names will be preserved but others will fall by the wayside once the "brand consultants" have performed their comparisons e.g. Scottish Widows v Clerical Medical, Halifax v Cheltenham & Gloucester.

There will also be businesses to be merged and already their CEOs will be wondering whether they will have a role going forward. An obvious example is the asset management businesses of the banks, namely Insight Investment [HBOS, £112bn assets under management] and Scottish Widows Investment Partnership [LloydsTSB, £90.2bn assets under management]. Whilst integrating these two firms is likely to take over 12 months, a combined management structure will be announced quickly if standard practice is followed. Following this, organisation charts will be fleshed out, respective counterparts met and plans will be drawn up to integrate including choices made over
The ramifications will continue long after this banking deal has been done. Anticipated annual savings of £1bn has been announced with the deal - that means people and infrastructure to be culled.

On an optimistic note, one can only hope that the annoying advert featuring the "surfing" staff member will be canned as a result of this merger.

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