Halifax, Bank of Scotland merger The £27 billion sterling ($38 billion) merger of mortgage bank Halifax and Bank of Scotland has been approved by the British government, making the new bank, HBOS, the fourth-largest bank in Britain.
The merger effectively is a takeover of Bank of Scotland by Halifax. Bank of Scotland has two Irish entities, ICC Bank and the former Equity Bank.
There was no opposition from the British government to the nil-premium merger because the new bank will not have the influence of Britain's four big banks - Barclays, HSBC, Lloyds and Royal Bank of Scotland.
"In fact, it may strengthen competitive pressure on the big four," the Trade and Industry Secretary Ms Patricia Hewitt said yesterday.
Her comments are seen as a sign of the government's desire to see smaller banks merge and take on the big players.
Halifax is Britain's biggest mortgage lender. "Ours is a pro-competition deal and we aim to make life difficult for the big four," said Halifax spokesman Mr Shane O'Riordan.
A previous Halifax merger with Abbey National fell apart earlier this year. Speculation in London last night centred on a merger involving Alliance & Leicester, which has said it is open to "attractive offers".
