London - Shareholders of Britain's Halifax Bank of Scotland (HBOS) Friday overwhelmingly approved a mammoth merger with Lloyds TSB bank amid further stockmarket turmoil. The merger, agreed at the height of banking crisis in September, was backed by 84 per cent of individual shareholders at a meeting in Birmingham, HBOS said.
The link-up will create a "superbank" with 145,000 staff and 3,000 branches in what analysts at the time called a "panic merger" backed by the government to the tune of 11.5 billion pounds (17.2 billion dollars).
Massive cash injections into both banks under the government's emergency rescue scheme of early October mean that 43.5 per cent of the new combined bank will be owned by the taxpayer, leaving existing HBOS shareholders with just 20 per cent.
The chairman of HBOS, Dennis Stevenson, apologized to shareholders for the impact of the credit crisis on investors. He was "neither happy nor proud" of what had happened.
Before the vote, HBOS revealed an increase in write-downs to 8 billion pounds for the first 11 months of 2008, from a level of 4.8 billion pounds at the end of September.
The news sent shockwaves through the banking sector, causing HBOS shares to plummet by 16 per cent on the London stock market. Shares of Lloyds TSB, which is in the process of taking over HBOS, fell by 17 per cent.
Other banks, including Royal Bank of Scotland (RBS) and Barclays, also saw share prices fall in London Friday.
