Page last updated at 15:08 GMT, Sunday, 21 September 2008 16:08 UK

Lloyds move 'only show in town'

HBOS sign
HBOS ran into trouble after its shares plummeted

Scottish First Minister Alex Salmond has said he would be "encouraged" by any move from independent financiers to keep part of the bank HBOS in Scotland.

Lloyds TSB unveiled a 12.2bn takeover of Britain's biggest mortgage lender after HBOS shares plummeted.

But Mr Salmond said his main focus was currently on the the Lloyds TSB offer, as it was the "only show in town".

Financial experts also cast doubt over whether any move to keep part of HBOS in Scotland could work.

Lloyds TSB has said it would retain the HBOS headquarters on Edinburgh's Mound, as well as Scottish banknotes.

HBOS has had a pretty difficult period over the last few months, not the last few days
Alistair Darling
Chancellor of the Exchequer

However Mr Salmond said he wanted the new firm to retain branch offices and key areas of decision-making in Scotland.

SNP MSP Alex Neil is to ask a group of elite bankers to make a 6bn bid to save the Bank of Scotland part of HBOS before it was taken over.

Mr Neil, a member of the Scottish Parliament's finance committee, said such a buy-out would keep jobs in Scotland, while also retaining the Bank of Scotland as an independent institution.

The first minister told BBC Scotland's Politics Show: "I'd look at and am significantly encouraged by anyone who sees the importance of retaining jobs, investment, decision-making and control in the Scottish economy.

"But the only show in town at the present moment is the Lloyds TSB bid for HBOS and Lloyds TSB are an excellent company with substantial Scottish roots."

He added: "The focus of most of my efforts is directed with that offer in mind, making sure that various commitments are honoured, because I have to mobilise the concern there is in Scotland to get the best possible outcome for the Scottish economy."

'Knockdown price'

Martin Gilbert, chief executive of international investors Aberdeen Asset Management, said a move such as separating the corporate banking division and keeping it in Scotland was unlikely.

"This is a phenomenal deal for Lloyds TSB shareholders to buy such a famous bank as HBOS, and they've got it at a knockdown price," he told BBC Scotland.

Sir Peter Burt, a former Bank of Scotland governor, added that the company could become "unbalanced" without a corporate services division.

He said other bidders for HBOS could yet come forward.

Meanwhile, Chancellor Alistair Darling denied Mr Salmond's previous claim that banning short selling earlier would have stopped the bank's takeover by Lloyds TSB.

Mr Darling, who insisted the alternative to a takeover was "just too awful to contemplate", said: "Alex Salmond complains that absolutely nothing had gone wrong until Monday or Tuesday of this week.

"As anyone looking at the markets could see, HBOS has had a pretty difficult period over the last few months, not the last few days."



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