Lloyds TSB agree to take over HBOS

Halifax Bank of Scotland (HBOS) is to be taken over by Lloyds TSB in a £12.2 billion rescue deal.

In a move that could impact those who have loans, savings or mortgages with the firms, they will merge in a bid to stave off the threat of bankruptcy for HBOS.

Normal competition rules that would prevent the agreement have been overridden by the government for the sake of national financial security.

Industry insiders had a mixed reaction to the takeover. Richard Buxton, the head of UK equities at Schroders, had a less than positive outlook.

He told the Telegraph: “The ramifications are horrific. Why would anyone provide equity capital to listed companies if the government can ride roughshod over them?”

However, regulatory body the Financial Services Authority said it could contribute to higher confidence among customers and investors.

It added that it may help to ensure stability for the troubled UK markets.

By Jamie Price