'Consumer concerns' over Lloyds TSB and HBOS mortgage merger

Date:Wednesday 1st October 2008
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The proposed merger of Lloyds TSB and HBOS will remove one of the leaders in the mortgage market, an independent consultancy group has claimed.

HBOS is a leading lender which had helped keep prices down and made cheap credit available for consumers, according to the Centre for Economics and Business Research (CEBR).

Charles Davis, senior economist at the CEBR, said the merger could be bad news for consumers.

Commenting on the proposed deal he said: "It is a well known thing if there is one market player they have more market power and they can manipulate the markets to their advantage more."

Should the deal succeed, that would "certainly" be a concern to consumers, according to Mr Davis.

It was announced that Lloyds TSB wanted to take over HBOS on September 18th in a bid to rescue the bank which was struggling under the recent unfavourable economic conditions.

Under the new terms HBOS shareholders will receive 0.83 Lloyds TSB shares for every one HBOS share.

The CEBR is an independent consultancy which offers business advice based on extensive research.