Analysts fear Lloyds TSB may come under pressure
Lloyds TSB is this evening at the centre of attention in the UK banking sector with talk that the group may well have to write down the value of its HBOS takeover which is still going through the courts. Many analysts fear the group will have to take a larger hit than first thought with HBOS having a significant exposure to the commercial property market and heavily involved in a number of high-profile housebuilding takeovers over the last couple of years.
There is speculation that the bank's investment into groups such as McCarthy and Stone and Crest Nicholson are "turning sour". If this is the case, and it may well be bearing in mind the recent activity in the housebuilding sector, the Lloyds TSB/HBOS merger may not be as beneficial to Lloyds TSB shareholders in the short term. Jason Napier of Deutsche bank is suggesting a "sell" recommendation on the stock and prefers Barclays bank.
The final rubberstamping of the Lloyds TSB/HBOS merger could not have come at a worse time being just days after the short selling ban ends. As with any investment it is essential that professional advice is taken as soon as possible.
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