LLOYDS HBOS MASS SACKINGS – as banks go for £17bn more bailout cash

0
925

The Unite trade union yesterday urged Lloyds TSB and HBOS ‘to start thinking about the human consequences of this takeover’.

It was responding to a Lloyds statement that its acquisition of HBOS would save a more than expected £1.5bn a year, raising fears of 40,000 job losses.

Both banks have also unveiled further write-downs and revealed plans to raise up to £17bn as part of the government’s banks bail-out.

Lloyds did not put a figure on job cuts, but said there was scope for ‘significant cost savings’ from combining the branches and back offices of the two banks.

Calling on the banks to stop ‘fuelling speculation’, Unite joint general secretary, Derek Simpson, said: ‘None of the staff at these two banks should be forced out.

‘We believe that if this takeover is managed properly, with the full involvement of the union, compulsory redundancies can be avoided.’

He added: ‘This takeover is unique, competition rules have been waived and the taxpayer has been forced to take a stake in these banks.

‘Where the government has the power to protect jobs it must do so.

‘The bank and the government must remember the wider social impact of this takeover and do everything in their power to protect hard-working families, their communities and to encourage confidence in the economy.’

Lloyds TSB said third quarter profits at its wholesale and international division had been hit by a £270m write-down on assets.

HBOS said write-downs and losses on bad debts for the first nine months of this year now stood at £5.2bn, up £2.7bn from the end of June.

Lloyds said it is seeking to raise £4.5bn from investors in a rights issue and HBOS is seeking £8.5bn. If the shares are not taken up, the government will acquire them.

The government will also directly buy £4bn of preference shares in the two banks.

It also announced that the combined group would be named Lloyds Banking Group.

Meanwhile it has emerged that the government will have to pump more capital into Northern Rock to reflect worsening conditions in the housing market.

In August, the government converted £3bn of its loan to Northern Rock into shares to bolster its core tier 1 capital ratio. It now may have to inject ‘£2bn to £3bn more’ into Northern Rock, said an unnamed government official yesterday.

l UK manufacturing shrunk for the sixth month in a row in October.

Low cost airline, Ryanair’s profits have fallen 47% in the first half of the financial year, due to a doubling of the price of fuel.

Net profits in the six months to the end of September stood at 214.6m euros (£169m) compared with 407.6m euros a year earlier, the firm said.

Oil prices have fallen, but Ryanair said it also expects to make a loss in the last six months of the financial year.

It confirmed that it is working on a new service to the US but on condition it can secure cheap long-haul aircraft from rival carriers.

Chief executive Michael O’Leary claimed that if oil prices remained below $80 a barrel then profits would recover.

He said: ‘We have a significant cost advantage over our competitors, many of whom have hedged fuel next year at significantly higher levels than current market prices.

‘This will force competitors to further increase air fares and widen the price gap between them and Ryanair’s lowest fares.’