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Tuesday, 1 May, 2001, 13:54 GMT 14:54 UK
Halifax upbeat on trade
Halifax and Bank of Scotland logos
Shareholders in Halifax, the UK mortgage bank, were given no update on merger talks with Bank of Scotland when they gathered in Edinburgh for their annual meeting.

Last week Halifax said it was discussing a 26bn "merger of equals" with the Edinburgh-based bank.

The Halifax issued a trading statement to coincide with the shareholder meeting, in which it said first-quarter trading had been "buoyant".

"We gave commitments to achieve a spectacular growth in sales right across the product range while delivering, at a minimum, our zero growth target for costs," Halifax said.
Halifax
Founded in 1852
Demutualised in 1997
Stock market value: 17.9bn (30 Apr)
Employees: 37,000
Pre-tax profit last year: 1.89bn (+8%)

"So far, in every case we are either exceeding or are in line with these targets."

Halifax also said integration of the Equitable was "proceeding well".

News of the proposed Halifax/BoS tie-up follows a long period of consolidation in the UK finance sector.

Last year Royal Bank of Scotland took over NatWest, Barclays snapped up the Woolwich, and Abbey National bought life insurance company Scottish Provident.
Bank of Scotland
Founded in 1695
Stock market value: 10.5bn (30 Apr)
Employees: 20,000
Pre-tax profit Mar - Aug 2000: 535m (+14%)

Abbey National also held long running and acrimonious merger talks with Bank of Scotland - which were scrapped in February after LloydsTSB launched a counter-bid for Abbey National.

Bank of Scotland has been seeking a partner for more than a year after failing in an audacious takeover bid for NatWest.

Mergers have been prompted by desires to cut costs through merging operations, or to muscle into the lucrative life assurance and pensions markets.

Job threat

A tie-up between Halifax and BoS would wed the UK's largest mortgage lender to a 400-year-old bank with strengths in traditional business, and particular success in attracting corporate customers.

The changing face of UK banking
2000
Feb: Royal Bank of Scotland buys NatWest
Aug: Barclays takes over The Woolwich
Sep: Abbey National buys Scottish Provident
Nov: Abbey admits merger talks with Bank of Scotland
Dec: Lloyds bid for Abbey revealed

2001

Feb: Abbey ends talks with BoS
The proposal, which some observers believe would create a fifth major force in UK banking, was welcomed by City analysts.

One forecast that, by merging, the banks would be able to cut 300m in costs.

While such a cost-saving package would be likely to spell job cuts, redundancies would be unlikely to be on the scale of those forecast in the proposed Lloyds/Abbey deal.

Lloyds predicts that the takeover would, in achieving 950m of savings a year, lead to the loss of 9,000 posts.

The deal is currently being investigated by competition watchdogs.

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See also:

25 Apr 01 | Business
Halifax and BoS discuss merger
25 Apr 01 | Business
Q&A: The Halifax - BoS merger
25 Apr 01 | Business
Bank of Scotland: Lucky at last?
05 Feb 01 | Business
Halifax seals Equitable Life deal
12 Dec 00 | Business
Abbey rebuffs new Lloyds TSB bid
31 Jan 01 | Business
Lloyds ups stakes in Abbey bid
14 Feb 01 | Business
The battle for Abbey National
14 Feb 01 | Business
Abbey posts record profits
03 Nov 00 | Business
Bank merger wave
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