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About 140,000 staff of the newly created Lloyds Banking Group will be summoned to meetings today as the bank begins operating for the first time following the rescue takeover of HBOS by Lloyds TSB.
As they prepared to meet, the bank was trying to avoid the government's stake in the bank rising to above 50% - up from the 44% indicated during the £37bn government bail-out for banks last year. The terms of the expensive preference shares attached to the bail-out being were being altered last night but Lloyds was trying avoid the preference shares being converted into ordinary shares - which would push up the government's stake.
A timetable outlining six main steps for a three-year integration are expected to be announced today, but management is unlikely to provide news on staff job losses after the creation of the group.
The enlarged group will have more than 3,000 branches - at least 800 more than its biggest rival, Royal Bank of Scotland - and will dominate high-street rivals with big market shares in mortgages, and current and savings accounts.
The deal, brokered by Gordon Brown in September, would usually have been examined by the Competition Commission. But the government tore up the rules to allow the transaction to take place.
Tori Watson, personal finance campaigner at the consumer group Which?, said: "Clearly the creation of the group has the potential to dominate the market and to make changes that would not be in consumers' best interests. We will be monitoring the position closely."
The group's management aims to make £790m of savings through measures such as closing branches. Integration of the insurance and investments arm will "save" a further £235m; and £430m will be taken from the international banking arm.
- Lloyds Banking Group
- HBOS
- Mergers and acquisitions
- Banking
- Banks and building societies
- Credit crunch
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