[Scarlett.]

HBOS and Lloyds TSB are two of the most well known names on the High Street.

If they merge they will create a giant financial services group, a further step in the consolidation of numerous banks, building societies and insurance companies that were independent less than 20 years ago.

HBOS

HBOS was created in 2001 when the Bank of Scotland merged with the Halifax bank.

The Halifax had been a building society until 1997 when it took part in the upheaval that swept the building society movement, and converted to become a bank in its own right, in the process converting its savers into shareholders.

It had swallowed up both the Leeds building society (in 1995) and the Birmingham Midshires (in 1999) to expand its position as one of the UK's biggest mortgage lenders.

That is why the enlarged HBOS group now has more private shareholders than any other UK company, at two million.

The Bank of Scotland boasts that it is Scotland's first and oldest bank, established in 1695.




It still has the right to print its own bank notes.

Both sides styled their merger in 2001 as the beginning of a new era.

With the UK's house price boom in full swing, it looked like a good idea.

And in 2007 the combined operation made profits of nearly £5.5bn, partly derived from the fact that 40% of UK households have some sort of loan or account with the bank.

It claims to hold one fifth of all the cash saved in UK bank accounts.

Within the space of 24 hours the outlook for it has changed radically.

On Tuesday it said that "HBOS has a strong capital base and continues to fund very satisfactorily".

Now it is on the verge of losing its independence and agreeing to be rescued by one of its biggest rivals.

LLOYDS TSB

Lloyds TSB is also a creation of mergers and expansion.

Lloyds TSB branch sign
About to become much bigger

Lloyds, for a long time one of the "Big Four" of UK High Street banking, took over the smaller Trustee Savings Bank in 1995.

In the same year Lloyds also took over the Cheltenham & Gloucester building society to expand its business in mortgage lending.

After that it continued to expand, for instance taking over the Scottish Widows insurance firm in 2000, although an attempt to buy the Abbey National bank the following year was thwarted by the Competition Commission.

Like all other UK banks, the subsequent years have seen it make profits on a previously undreamt of scale.

In 2007 it made £4bn.

Despite the credit crunch, this year has seen it expand its mortgage lending aggressively, just as HBOS has been reining in its own new mortgage lending.

Lloyds TSB has been making special offers to customers of the stricken Northern Rock who have been coming to an end of their deals with the now nationalised bank.

Lloyds TSB now appears to be on the verge of becoming rather bigger than any of its executives might once have imagined.


BBC News

[Sam!]

What will happen to the adverts :O....

the singing ones with that guy, and the "ah ah ah ah ah" train ones.

[MR.K!]

Originally posted by Scampi
What will happen to the adverts :O....

the singing ones with that guy, and the "ah ah ah ah ah" train ones.

YES !!! YESSSSS ! No more annoying adverts !!!! :da nce:

[Scarlett.]

Lol the guy will be singing on the train with those freaky "Nightmare before Christmas" style people O_O

[Rocko]

Originally posted by Scampi
What will happen to the adverts :O....

the singing ones with that guy, and the "ah ah ah ah ah" train ones.

Haha, that's what I was thinking (instead of the financial repercussions on customers and stockholders).

[Annie]

I love adverts for banks

[Tom]

Oh ******, I don't care if its merging or not. One of my accounts is with Halifax, I'm going to empty it out tomorrow in case theres another Northern Rock type situation

[Markymark]

I'm into my overdraft with Halifax so if they go under does that get wiped out?

[Scarlett.]

It isnt going under, Lloyds and Halifax are now the same company

[Annie]

I am into my overdraft big style with HBOS and always paying bank charges! I will keep them afloat! haha