What does the takeover of HBOS by Lloyds TSB signify for the Secured Loans Market?

In the current turbulent financial climate the take over of HBOS by Lloyds TSB is by no means an end to the UK and indeed global financial crisis. Over the coming months it is predicted that there will be further causalities which must be a concern for everyone.

For the short term, the news of the takeover effectively translates to one UK financial institution now controlling a third of the UK savings and loans market which is not necessarily a good thing for competition. If you’re a potential borrower looking for a secured loan the likelihood is that interest rates for such products are likely to be higher and fewer secured loan products will be available. In addition, if you’re deemed a bad credit risk, it will be harder to borrow.

Why? It is already rumoured by some financial pundits that Cheltenham and Gloucester owned by Lloyds TSB will fall by the wayside as they are a direct competitor to Halifax who form part of the HBOS Brand. If the speculators are right, at a stroke there could be a fewer financial products on the high street and online.

Had it not been for the current credit crunch crisis, the competition commission and FSA regulators would have effectively blocked the takeover by Lloyds in the interests of competition. However, such a move will not now happen in the interests of financial stability in the eyes of the current Government.