The Kintyre Forum

Shocking news! Some questions and thoughts:
Surely Bank of Scotland is a major employer in Scotland? This will be devastating news. We now see the effects of greedy banks yet ordinary people will suffer.
Will they continue to print their own banknotes?
Was it a mistake to merge with the English Halifax?
There was a great deal of discussion on the news last night which really shocked me. There were many English folk spouting xenophobic rubbish about Brown and Darling protecting Scottish jobs at the expense of English workers. Yet Scotland had to contribute when the Northern Rock collapsed. Surely it's a case of British workers losing out? I don't see the need to see this as a Scottish bank going under. Or is Scotland going to get the blame now for the state of the world economy?

I think most people would be of the opinion that a bank HQ'd in Edinburgh since 1695 is indeed Scottish, regardless of whether it merged with another institution seven years ago.

I don't see that the nationality of the workforce matters, its where they all spend their wages that's important and as you say Govangirl, HBoS is a major Scottish employer therefore the Scottish Economy will undoubtedly suffer as a result of this.

For me there is something not quite right about the whole thing though. £12.2bn takeovers just dont get agreed between breakfast and brunch.

I might be alone in thinking this but I reckon there is a slight possibility the whole deal may not go through. The deal needs shareholder approval in November and whilst, a 232p per share offer on Wednesday morning when HBos was trading as low as 88p looked attractive, and was perhaps the only alternative to bankruptcy, I don't think it is quite so generous now that HBos has recovered to 222.5p. With the news that the FSA has outlawed shorting until mid January what will happen if HBoS continues to rally in the next few weeks an is trading in excess of the offer price?

I don't expect to be right here and it is very sad that one of Scotland's largest and most historic PLCs has effectively been wiped out over night.

There is little difference in the market capitalisation of Lloyds and HBoS and if a the hedge fund managers has chosen a different target we could have been looking at a takeover the other way round this week. What happened to the price of HBoS shares should never have been allowed to happen and short selling needs to be regulated long term. Its fine provided it is just used to reduce risk but when done purely for financial gain it decreases the stability of the whole financial system.

Don't really think this has much to do with a Scotland v England situation. HBOS is a British bank and has been for a number of years, I'm guessing there will be more people employed in England than there is in Scotland, but that's reasonably immaterial.

This deal is not through yet, my understanding is that it will not be concluded until December, so it will be interesting to see what happens if the share price is sitting at 120p in December as opposed to the 224p agreed with Lloyds.

Equally I don't think Lloyds would agree to spend over £12bn in the space of 2 days, so my thoughts are that talks began a number of weeks/months ago, however stalled on the basis that it would never get passed the Competition Commission. I'm sure there would have been a fair amount of due dilligence completed prior to Wednesday's announcement.

I also understand that people were withdrawing money on Tuesday only pay it back in again on Wednesday when things had calmed down again! I really don't think there's anything the Government could have done other than let it pass without referral.

Essentially HBOS are guilty of some pretty poor managerial decisions, and they're now paying the price - however in the long term, it remains to be seen the price the rest of us will have to pay for the arrogance and mismanagement of the financial institutions.

Hume - your update seems to have appeared whilst I was posting mine - I think we seem to be agreeing

I reckon our branch here in Campbeltown will see no change for the worse (Hopefully)

But I can certainly see changes in areas where there are a few branches together....

Seen a few streets over the years with 2 branches..... Big change for them

maxmix

Seriously......

If you had purchased £1000 of Northern Rock shares one year ago they would now be worth £4.95.
With HBOS, earlier this week your £1000 would have been worth £16.50.
£1000 invested in XL Leisure would now be worth less than £5.

But if you bought £1000 worth of Tennents Lager a year ago, drank it all, then took the empty cans to an aluminium re-cycling plant, you would get £214. So based on the above statistics the best current investment advice is to drink heavily and re-cycle.

Govangirl wrote:But if you bought £1000 worth of Tennents Lager a year ago, drank it all, then took the empty cans to an aluminium re-cycling plant, you would get £214. So based on the above statistics the best current investment advice is to drink heavily and re-cycle.

But whatever you do, don't drink it in public!

Isn't it wonderfully ironic that the banks, who have the temerity to pontificate to their customers as to how they should organise their personal and business finances, now find themselves in a similar position to many of these same customers through their own irresponsibility.

I wonder if these banks will now be listed with the credit reference agencies etc..

EMDEE wrote:I wonder if these banks will now be listed with the credit reference agencies etc..

Most definitely EMDEE, all banks and other instititions who source debt as a means of finance will have a credit score. Various agencies provide a scoring system, for example AAA, AA (investment grade) being 'secure' and CCC being much more risky. The holders of sub-investment grade Bonds (Junk Bonds or High Yield Bonds) can expect a higher interest rate in return for the additional risk they carry.

Having said all that, in the last two weeks credit ratings have meant hee-haw!

Edit: spelling