The UK's Treasury will soon be in possession of 43.4 per cent of the UK's largest banking group as Lloyds TSB and HBOS look set to merge and form Lloyds Banking Group.
The news was announced as Lloyds TSB
revealed that its existing shareholders only took up 0.5 per cent of the new shares
it offered, despite all directors taking up their entitlement.HBOS
, the other party in the merger has also suffered a similar fate as just 0.24 per cent of its shares were taken up, leaving the UK taxpayer to pick up the pieces.
The merger is expected to be completed by January 19, when Lloyds TSB and HBOS will start trading as Lloyds Banking Group and control 25 per cent of the UK's personal bank accounts and around 28 per cent of the mortgage
HBOS became a victim of the credit crunch earlier this year when its value fell dramatically and a merger became the bank's only way out.
As a result the Government waivered competition rules as it had no choice but to allow a merger with Lloyds TSB to rescue the bank.
Shares in Lloyds Banking Group will start trading on the stock market from January 19 following the deals approval which is expected in Edinburgh later today.
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