30,000 jobs at risk in Lloyds TSB / HBOS merger

| November 3, 2008 | 0 Comments

It was confirmed this morning that the Lloyds TSB and HBOS merger is proceeding and the new name for the company was unveiled as Lloyds Banking Group.

According to Lloyds, its acquisition of HBOS would save it at least £1.5 billion a year, far more than originally anticipated.

There have been concerns that the cost savings will result in major job losses and analysts are predicting that 30,000 jobs could be at risk if the merger is successful.

Lloyds TSB has not divulged how many jobs will go, but said there was scope for considerable cost savings from merging the branches and back offices of the two institutions.

Meanwhile, both banks have announced plans to raise up to £17 billion through the Government’s rescue scheme.

Lloyds said it plans to raise £4.5 billion from investors with the support of the Government and will offer the Government preference shares worth £1 billion.

Meanwhile, HBOS said it plans to raise £8.5 billion through investors and will offer the Government preference shares worth £3 billion.

Separately, according to reports over the weekend, an unnamed bidder has emerged and has been in discussions with the Government with regard to acquiring HBOS.

According to Jim Spowart, a Scottish businessman and founder of Intelligent Finance, the interest is genuine and he is reported to be working with a European financial services company, whose identity is yet unknown.

Despite this, both Lloyds TSB and HBOS have confirmed their commitment to the merger deal despite reports a rival bid.

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