Lloyds and Halifax to merge?

Published:

17 September 2008

Topic:

News,Money

Today's speculation is that Lloyds and HBoS are to 'tie the knot' and merge. This follows days of pressure on HBoS where their share price has fallen heavily.

I don't know if this will happen but I feel a degree of despondency to think this may be being forced on an organisation that includes Bank of Scotland, Intelligent Finance, Birmingham Midshires and, 'jewel in the crown', the Halifax.

I've racked up 25 years in the personal finance industry and I've always looked up to the Halifax. It's been the biggest mortgage lender in the UK for donkey's years and not many moneysupermarket.com users won't have had either a mortgage or savings account with Halifax. You only have to bob into one of those old pre-internet 'thingys' called branches to see how many customers they have! Most bank or building society branches are so quiet these days you'd think you were in a church or a library but, lo, go into any branch of the Halifax and they are jammed to the rafters.

I, like quite a few of the team here, frequently speak to the press and do TV and radio interviews. Often in the intro presenters will describe me as a 'personal finance expert from moneysupermarket.com'. Nice and flattering of course, but in truth I squirm a little because I often feel there's hell of a lot more that I don't know than what I do. Case in point this whole credit crunch has at times left me bemused - I was shocked when Northern Rock got into trouble and I really can't see why HBoS is under pressure. OK, redundancies are rising and so are arrears. In turn this will lead to more repossessions but the numbers are still low and nowhere near a crisis (clearly it's a crisis for the individuals involved). House prices are falling so it is possible that when repossessions occur the lender will lose money. However in the overall scheme of things this is 'small beer'. So why the pressure on HBoS?  For me it shows how much 'confidence' is a factor and I worry that the City with its aggressive short term money market investments is causing unnecessary havoc. I discovered today that it used to be illegal to 'short' on a bank. Maybe that's a law that should be re-introduced. We all need reliable and safe banks.  

We've seen Alliance and Leicester taken over by Abbey recently and only last week the Derbyshire and Cheshire Building Society's fell under the protective umbrella of Nationwide. Let's see if HBoS merges with Lloyds. Whether it does or doesn't I am sure the great brand of Halifax will live on.

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