Thursday, September 18, 2008

HBOS merger with Lloyds TSB, what it means to you

Halifax Bank of Scotland, the oldest bank in Britain is going to be merged into conservative Lloyds TSB, which means the biggest British Bank in history. Under which many things have to change, and of which these are the things you need to know.

Bank of Scotland notes (aka Scottish Banknotes) will now cease to exist if things are done the Lloyds TSB way. Which means, former notes of Hamilton , British Linen and other old banks and brands which Bank of Scotland (aka Banc Hal Alba in Gaelic) took over many years back will now change. I am not been briefed on the changes.

Sainsbury's joint venture with BOS known as SAINSBURYS BANK will also change, as BOS 50% holding and licensing will then be transferred to the new entity by LTSB. In actual fact, TSB took over Lloyds and well, we just see how it goes.

Intelligence Finance (IF.COM) and Midland Shires will also cease to exist. Internal sources said that savers of these brands of Halifax will then be changed over.

Existing customers with Bank of Scotland who just got familiarised with the Halifax's Society Roll 8 digit numbers (D/ (or coded 4) for current, 2/ for savings, 14/ for pensions, etc which can be known on your debit card 4917xx4x-xxxx-xxxx) will then be totally changed over to the LTSB system of just plain sort code and account number.

E-Savers, coded 11-18-11 (2/) will change to the new format. As for ISAs , TESSA and Cash ISA / Mini etc, will also change to the new system. Just forget the old Roll Numbering. This is unless the acct is opened at the local branch.

Is your money safe?
Plainly, I have the greatest clue here. Sources say that the currency notes by HBOS will be useless. So EXCHANGE FOR ENGLISH NOTES ASAP. Clysdale Bank Notes is still good even though it uses HBOS as it clearing agency. Royal Bank of Scotland notes are still legal tender despite buying over ABN AMRO Asia Pacific Region.

Financial Protection by the FSA covers only 35,000 quid per person, irregardless of your number of accounts. So if you have a good sense of money in the Halifax, Bank of Scotland, Intelligent Finance, Midland Shires and the like, take them out NOW! Includes any ISA and SHARE BASED. You can top up share holdings, but it's your call, if you are gutsy enough.

What it means is,if you have money stashed out over 100k, you are a sitting duck! 10k is a good safe bet on each bank, namely Barclays, RBS Group (includes NATWEST ,Ulster etc etc), Clysdale Bank, HSBC (Try to avoid as it's partly to blame for Merrill Lynch fiasco, main shareholder)

Nationwide is a 50/50 bet, and ABBEY is now part of Santander group, the flame as they call it. So Alliance & Leicester (GIROBANK) is about to be acquired by them, so stay away from A&L!!

Building societies like Saffron Walden, West Bromwich, Kent Reliance are so far safe as they only lend to what they have. ISA rates are not brilliant but they are safe. The Co-op Bank is kind of a hit and miss now.This is due to the Travel Industry in shambles, and the sales been hit hard at their stores.

Islamic Bank of Great Britain (Islamic-Bank.com) is another source of putting your money in. Backed by many great governments and it's based on Halal Concept. The Islamic Banking sector is not even hit during this crisis as they don't borrow from another bank to make money out of their transactions.

So I have started my run off the bank. Mortgage wise, try the alternative. It's all subject to the competition laws etc in UK, so they may be bought over by an external bank.

So watch out!

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