Lloyds TSB is in advanced merger talks with HBOS to create a UK retail banking giant, the BBC reports this morning.
A merger would mean Clerical Medical, owned by HBOS, and Scottish Widows, owned by Lloyds, would be part of the same group.
On the mortgage side, the new retail banking giant would include Halifax owned by HBOS and Scottish Widows Bank and Cheltenham and Gloucester which have Lloyds as their parent.
Meanwhile asset managers SWIP (Scottish Widows Investment Partnership) and Insight, owned by HBOS, would be part of the new group which raises questions as to whether they would be merged into one unit.
However, there have been market rumours over the last few months that Lloyds may consider offloading Scottish Widows which will be a consideration in merger talks.
The BBC says the deal would end uncertainty about the strength of HBOS following the calamitous run on its shares.
HBOS shares rallied on the news up 18.13% this morning to 215p compared to 300p at the end of last week. Lloyds’ shares rose 4.2% to 291.5p this morning.
Both HBOS and Lloyds declined to comment on the news.IFAonline
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