Apparently the £37bn package is not fully working.

Stocks are tanking all over the world. In the United Kingdom the £37bn bail out package for the three major banks of Royal Bank of Scotland (RBS), Halifax Bank of Scotland (HBOS) and Lloyds TSB is not fully working. The package has done really well to shore up the three banking groups but has been unable to get Libor down. This would free up lending.
I have just read a Forbes article and it mentioned the words "credit standards" and "weaker borrowers". This will see banks tighten up lending criteria on their clients both in the United Kingdom and in the United States. In the British housing market borrowers need a hefty deposit just to get going. The Halifax will be so much more cautious after suffering a near-death experience. While Northern Rock, despite its nationalised nature, is repossessing 32 homes a week.
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There is talk that the mortgage portfolios of Northern Rock and Bradford and Bingley could be merged, which would help reduce costs. It might help if the Halifax injected a part of its mortgage book as well. This could reduce competition concerns about its merger with Lloyds TSB.
Royal Bank of Scotland has got a massive balance sheet and it will probably take time to bring under control. I wonder if the government knows what it has got into. A smaller institution might be a safer one, which would not bode well for employees.

I am a bit depressed by the Manchester City result.

Can you really buy success on the football field? Manchester City walloped Pompey six-nil and there was the whole spectacle of Calamity James coming out and missing the ball and the ridiculous little dances by City players as the goals went in. They should have been booked by the referee and they might have been if the referee was the venerable Mike Riley. He did not do much for the Chelsea-Manchester Utd clash although the Blues had enough chances to win it.
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I read the Sunday papers and was flabbergasted to find out that Lloyds TSB has wanted to buy out fellow banking group HBOS for several years. The only figure being put out by Lloyds TSB is £1bn. This is the figure for cost savings but the banking group has not been prepared to announce how many job losses there will be.

Halifax goes down with all hands!!

The considered, precise view on the Halifax (HBOS) rescue by Lloyds TSB can be found on a good story carried by FT.Com http://www.ft.com/cms/s/0/d7fa43e0-8496-11dd-b148-0000779fd18c.html?nclick_check=1. This blog will muse on what was the glory of an UK mortgage bank with a balance sheet of £600bn.

For instance, the share price performance of Halifax was pretty dire and signalled major operational shortcomings. It must have been dire to consider a merger, sorry a takeover by Lloyds TBS, a bank, which has grown by mincing companies. Halifax board members and executives will know that they will not have much of a future in the combined group unless a leopard has changed its spots.
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Founded in 1853 at the Old Cock Inn in the Yorkshire town of Halifax, the institution grew from a building society to a major financial group cemented with the acquisition of Bank of Scotland to form HBOS. I did have the shares from the demutualisation of the building society but had to sell at around £4 due to household necessities. I also had a current account, which paid excellent interest but I was getting disturbed by sales calls from Halifax staff trying to sell insurance etc.

For many years Halifax was in competition with Abbey National, which is now owned by
Banco Santander of Spain. Ironically, Lloyds TSB tried to acquire Abbey National in 2002 and now must be having a wry chuckle with the start of the process to buy the Halifax, which has a market leading 20 per cent of UK housing loans.

Apparently, UK Prime Minister Gordon Brown has been involved in the negotiations since the deal will get a waiver from competition problems. However, I don't know what the European Union will think of that. Yet, speed is required for the transaction to go ahead and I don't think the British government would be interested in nationalising Halifax following its rescue of Northern Rock.

Halifax shares have another poor day.

The shares of British banking group Halifax have had another poor day and that is putting it politely. The stock market can be a pretty good indicator of future operational performance and it might be pretty ugly for the group, which was originally founded in the Old Cock Inn, Halifax, in 1853. The bank has stated that it has a strong capital base but its shares are closing down
18 pct to £1.90 (BBC Website).
I did have the shares ages ago and I had to sell at around £4 and was kicking myself as they soared up to the ten pound level. It is probably too risky to buy the shares at this level not that I am the world's top equity trader.
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I wish I had the dosh to buy a few as a bet, nothing scientific mind you, but I think the most I can muster up at the moment is a paltry £400. You need over a thousand just to cope with the commission.
In the recent past I did sign up to a Halifax account but the problem was that they kept ringing up (okay twice) in the evening to try and sell me something. I also had a car insurance policy and the problem there was admin in India, where we both did not really understand each other.

Halifax shares have recovered to 16 pct down

The previous blog had the shares of UK mortgage bank Halifax Bank of Scotland (HBOS) down to £2.29 but now they have recovered to, sorry, volatile trading and they
are down 21.6% pct to £2.21. This is not good. Apparently, the stock market does not like the funding structure of the bank, which is very reliant on wholesale finance. The share price performance is telling us that Halifax is in a weak position.
The Bradford and Bingley, my favourite British bank, has also been marked down by just under 15 pct, which is again not good.
www.searchaccountants.co.uk My wife still has some shares in Bradford and Bingley, which was once a proud Northern building society. However, it did raise £400m from investors and is apparently shrinking its lending. I was really unimpressed by B and B venturing into synthetic products.

The Lehman Brothers collapse is very sad.

With another Black Monday, the collapse of U.S investment bank Lehman Brothers is very sad. Consumption in New York and London will be hit by the loss of highly-paid jobs. For instance, New Labour has enjoyed a nice tax take from the City of London, so we will be all affected. There might be some schadenfreude about these guys losing their jobs but there will be ripples affecting everybody.
I suppose one positive aspect is that creative destruction is part of capitalism but is a bit painful to watch. Halifax (HBOS) shares are getting a right kicking today (15/9/08) and I think the fundamentals cannot justify such volatile trading. I did hold Halifax shares years ago but I sold them since I needed the money. There is a City adage of "never catch a falling knife" so I would wait before buying. That is just an uninformed opinion. The City tried to get some bid rumours going with the idea that the Spanish bank BBVA would be interested in the
northern institution. It is going at £2.29 per share at the moment.
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UK bank Halifax has a flop with its rights issue.

 The UK banking group HBOS (Halifax Bank of Scotland) have experienced a flop with its rights issue or capital raising issue. Just 8 pct of Halifax's shareholders have taken up the rights and the bank's main underwriters Morgan Stanley and Dresdner are looking for other investors right now.
The missus is in the quandary of whether to take up the rights at Bradford and Bingley, a much smaller operation than Halifax, in its £400m capital raising operation.Both Halifax and Bradford and Bingley have been sitting ducks for short-selling due to the long process of raising new money from a rights issue (you have the right to buy shares in the proportion of those you
own).
Royal Bank of Scotland benefited from being first in the queue with its £12bn issue although no one seems to want theScottish banking group's Direct Line. I am a Direct Line customer and feel a bit sad that RBS wants to sell it. This is so to raise more cash following the expensive acquisition of
the majority of Dutch banking group ABN Amro.www.searchaccountant.co.uk

The Alistair Darling budget (part two)

I suppose the Alistair Darling budget has already been blown away with events. Previously, the UK Chancellor made a call for
old-fashioned banking and Northern Rock hit problems. Now, the U.S Federal Reserve
and J.P Morgan have had to rescue Bear Stearns. Perhaps, we should wonder how Darling would cope if more British banks hit problems. There is always the nationalisation option, although Gordon Brown must be wondering if the private sector solution to Northern Rock would have acted as a better precedent. Capacity
could have been taken out of the market, which would have hopefully led to
higher profits and capital generation.

If British banks cannot lend and therefore support the economy, they should carry out rights issues to raise new capital. The bank bosses don't want to do this since
they would lose their jobs but they might have no choice. HBOS has raised £750m at quite a high interest rate but this is quite a paltry sum given the size of the
UK mortgage bank.