Were Lloyds Bank investors short-changed with HBOS?
As the acquisition of HBOS continues to unravel before our very eyes there are serious concerns that investors in Lloyds Bank have been short-changed by the acquisition. It is no secret that Gordon Brown and various regulators in the UK were very keen to see Lloyds Bank step in and save HBOS as the company was literally on the verge of collapse. However, just a few months after the acquisition has been cleared it has been revealed that the HBOS loan book is much worse than first anticipated.
This has led to a significant increase in bad debt provisions for the new enlarged Lloyds Bank group with many original Lloyds Bank shareholders left with a bitter taste in their mouths. The government has now turned round and blamed Lloyds Bank executives for their role in the takeover omitting to comment upon suggestions that the UK government was very "keen" for the merger to go ahead. A bank which for many years had a reputation as one of the most conservative and risk-free in the UK has now been brought to its knees by the disastrous HBOS acquisition.
Even though the acquisition may turn out to be a good move in the longer term, exposing Lloyds bank to different areas of financial markets and bringing in a significant number of new customers, the short to medium term outlook is anything but optimistic.
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