Edinburgh Development Summary

[Brilliant]

About HBOS (nice to see that people here aren't overreacting as people have done on the Scotsman's website):

From what I understand:

1) Global HQ and listing will be in London.
2) The new group's Scotland HQ will be in Edinburgh, two of the biggest divisions (insurance and investment) will be HQed in Edinburgh. HBOS shareholders will hold 44% in the new bank to be called Lloyds Halifax. The insurance parts will be all branded Scottish Widows. The BOS brand will remain in Scotland.
3) From this it seems that the HBOS operational HQ in Halifax will close and move to London. Halifax seems to be the part of the country most hit and the 'Halifax' remaining in the name is a terribly small consolidation.
4) Scottish pound notes will continue to be issued.
5) Job losses are inevitable and will happen in the whole of the UK where overlap exists. Even though a highly weird clause of protecting Scottish jobs exists. I find that very weird and hardly acceptable for people in Halifax for example.
6) It would seem HBOS was close to a Northern Rock situation in the sense that the drastically falling share price could have led to a run on the bank and thus insolvency. Let's not forget what killed Northern Rock was the run on the bank and its loss of trust.
7) Whilst no fan of Labour I reckon they did the best thing for Britain and Scotland in this situation of extremely aggressive trading and rescued HBOS from being killed first on the market then later on the street by a bank run. A UK domestic solution must be better than bankruptcy or a foreign takeover with all HQ's (divisional and global for certain) going overseas.
8) Also noteworthy is that discussions about a deal had been ongoing for six weeks already.

[maccoinnich]

Well, if I want to put a good spin on it, the Sunday Herald is reporting that Scottish Widows is going to effectively double in size. So, while this week may have been a loss for Edinburgh for its importance in the banking world, it's a gain for it in insurance. (Not that I want Scottish Widows to do too well - I own a very small amount of their competitor, Standard Life...)

[AshAshAsh]

" (Not that I want Scottish Widows to do too well - I own a very small amount of their competitor, Standard Life...)"

Oh dear - does this make you one of the 'short-selling spivs' that Alex Salmond was so angry about the other day?

[maccoinnich]

Absolutely not! Aint no short selling coming from MacCoinnich!

[M_Riaz]

Originally Posted by Brilliant

About HBOS (nice to see that people here aren't overreacting as people have done on the Scotsman's website):

Oh aye there will be big reactions if this comes through.££££

Financiers in £6 billion bid to save Bank of Scotland

AN ELITE group of Scottish banking "elders" is being mustered to make an audacious £6 billion bid to save the Bank of Scotland.
In an unprecedented move, the senior SNP backbencher Alex Neil MSP, an economist and member of the Scottish Parliament Finance Committee, is writing to a distinguished group of leading bank figures to hold an exploratory meeting in Edinburgh this week.
It is inderstood the first minister Alex Salmond has been told of the plan and is said to be sympathetic to any proposal that will save large numbers of jobs in Scotland.

continues @ the Sunday herald

[maccoinnich]

I'm no expert on finance, but I can't understand how this could be possible. Until 2006 Halifax and Bank of Scotland were different companies, owned by HBOS, which is a holding company. Following the HBOS Group Reorganisation Act 2006, the two have one legal identity, with a joint customer base, and common back office administration. I just can't see how they could easily be disentangled.

[Brilliant]

It won't happen, it's nonsense, financially and economically.

[Cicero]

I'm not an expert on finance either, but speaking as a lawyer for a second, it would be massively complex to disentangle the companies. Those opposed to a Lloyds takeover would be better to find an alternative takeover for all of HBOS, though the prospective competitors are perhaps even worse.

[maccoinnich]

As if Edinburgh didn't have enough Allan Murray buildings on the go. I'm actually in agreement with Magnus Linklater on this one:

It's decision time on soCo vision for Old Town site


FRESH: This computer-generated image shows how the SoCo development would look from Blair Street
Published Date: 23 September 2008
By ALAN RODEN

NEARLY six years after a major fire ripped through the heart of the Old Town, plans for the future of the derelict Cowgate site have been submitted to the city council.
A 200-bedroom hotel, a festival venue and glass walkways all feature in the £40 million scheme, which will create a link between South Bridge and the Cowgate.

Developer Whiteburn Projects today also announced a deal with Hoxton Urban Lodge to run the "funky budget boutique" hotel – the first foray outside London for the firm led by Pret a Manger co-founder Sinclair Beecham.

As expected, there are no plans for any housing, but the scheme – dubbed SoCo – also includes a shop, a main restaurant and bar, a cafe, a business centre, a new home for the former La Belle Angele nightclub, an extension to the Chambers Street jazz cellar, and two new pends and courtyards. Around 200 jobs would be created on the site, plus another 100 during the construction.

..continues at the Edinburgh Evening News.

[M_Riaz]

Originally Posted by Cicero

I'm not an expert on finance either, but speaking as a lawyer for a second, it would be massively complex to disentangle the companies. Those opposed to a Lloyds takeover would be better to find an alternative takeover for all of HBOS, though the prospective competitors are perhaps even worse.

Very true,what they are saying the deal will take more than 3 years to amalgamate in which time a predicted recession will come and go which means any prospective company that takes over will reap the benefits (who has this kind of money to do this at this time other than the governments?) why not try and do a deal and seperate for the future of scotland, makes sense IMO.

BBC

Salmond to lead bank presentation

Alex Salmond is to lead a government presentation to Lloyds TSB's chairman, Sir Victor Blank, it has emerged.
It comes after First Minister Alex Salmond's talks with the bank's board member Archie Kane, who is drawing up details of the £12.2bn HBOS takeover.
During the talks Mr Salmond pressed for assurances about potential job losses and for the new bank's headquarters to be in Scotland.
Mr Kane said Lloyds TSB had to listen to the issues raised at the meeting.

[Cicero]

They agreed a £120m compensation figure if the deal falls through because by the time any deal comes close to completion, the market will likely have rebounded. HBOS shareholders, myself included, will be less receptive to an offer of 0.83 LTSB shares to every HBOS one if HBOS has recovered. Indeed, £120m may be considered a small price to pay.

As for the SOCO development, I don't really mind what it looks like as long as we get more than just 'potential' on that site!

[gothicform]

doesn't matter. HBOS has £100 billion of short term debt that needs funding. it cannot secure it alone. unless the debt market, not the stock market has rebounded you have 2 options -

1) HBOS goes bust, you lose everything
2) you vote for the take over.

During the talks Mr Salmond pressed for assurances about potential job losses and for the new bank's headquarters to be in Scotland.

is he insane? "oh yes, we're an english bank with our headquarters in london. let's expensively move our headquarters to scotland because we've taken over this minority concern that was going to run out of money because we want to please alex salmond! let's not worry about them getting independence and being headquartered in scotland because if we over run into trouble again the scottish economy will bail us out! oh... we'd bankrupt them."

imagine if HBOS had gone to the wall with an independent scotland. the bank was majority owned by former halifax shareholders and headquartered in scotland just to save money on banking licenses and allow them to keep printing notes cheaply, the majority of the business is done in england, the majority of the staff and branches are in england, and the bank with £100 billion of immediately liabilities it cannot honour needs the scottish government to bail it out because that's where it is based! the american government is struggling to do a bail out less than four times the size of that despite being an economy 75 times the size.

i hate to say this, i grew up in scotland and my family and i have always banked with them but they are simply too big for the place. they aren't a scottish bank anymore and the scottish government would not be able to provide the same level of financial backing the uk government can. of course my preference would be to spin the scottish domestic business and investment banking out of HBOS, not least because the halifax side buggered up the customer service and shut down so much but also i think unless that happens scotland will have to lose it. scotland simply isn't big enough to support such institutions as a uk consumer bank if they face financial oblivion.... and this applies to RBS too. scotland if independent would be in the unique position of being a country capable of being bankrupted by the collapse of a privately owned company!

[Cicero]

Yes I agree with that, much the same as the precarious position Iceland could well find itself in. I agree that an independent Scotland could not handle financial difficulties of this size on its own (though the ECB maybe could?).

I do believe however that the debt market will recover when the stock market begins to. There are necessary adjustments to be made in the housing and consumer credit sectors but essentially HBOS is a well capitalised bank which has lost the confidence of the financial sector. The most important thing in all this is when banks begin to trust one another again. I think that is likely to happen when the true losses of the subprime market are finally known, but I believe that may well be within the year.

[maccoinnich]

I don't think the comparison with Iceland is particularly apt. The whole of Iceland has a population that is only 3/4 of Edinburgh's. It has the world's smallest floating currency, which makes it spectacularly vulnerable to speculation in the markets. Even ignoring the fact that Scotland has about 15 times the population of Iceland, not even the SNP are proposing that Scotland would have its own currency.

But really, Gothic, what do you expect Salmond to do? I'm no fan of his, but he is the First Minister of Scotland, and it makes sense for him to try and keep as many jobs (and in particular, high end jobs) in Scotland. And not that I'm in favour of independence, but the analysis that large banks and financial institutions can't survive in a small country must come as news for Switzerland (population: 7,591,400).

[belle]

This is what I love about internet forums, the variety of wisdom!

[Brilliant]

Yes I agree with that, much the same as the precarious position Iceland could well find itself in. I agree that an independent Scotland could not handle financial difficulties of this size on its own (though the ECB maybe could?).

The ECB does not bailout afaik, when IKB in Germany went bust it was Germany that bailed out, not the ECB.

I don't think the comparison with Iceland is particularly apt. The whole of Iceland has a population that is only 3/4 of Edinburgh's. It has the world's smallest floating currency, which makes it spectacularly vulnerable to speculation in the markets. Even ignoring the fact that Scotland has about 15 times the population of Iceland, not even the SNP are proposing that Scotland would have its own currency.

So England or Germany are going to take on 140 billion euros of liabilities because you might have the pound or euro as currency? I don't think so. Having the same currency means nothing when it comes to bailouts. Being the same nation does.

But really, Gothic, what do you expect Salmond to do? I'm no fan of his, but he is the First Minister of Scotland, and it makes sense for him to try and keep as many jobs (and in particular, high end jobs) in Scotland. And not that I'm in favour of independence, but the analysis that large banks and financial institutions can't survive in a small country must come as news for Switzerland (population: 7,591,400).

None of their large banks have gone bust yet, if UBS for example does and Switzerland wanted to resuce it......... they couldn't do so.
I agree however that Salomd will try to pretend to do 'stuff' about HBOS, he knows full well his plan is idiotic but it might go down well with the masses, who knows.

[indiekid]

It doesn't seem to be Brilliant. A lot of people are starting to get annoyed at the sight of him these days.

[maccoinnich]

I'll admit something: I misread the bit above as "the precarious position Iceland has found itself in." ie, thinking Cicero was talking about this year's run on the króna. So my bit above was a bit of tangent.

But I still think it's ridiculous to say that large companies can't be based in small countries, and there are plenty of examples that prove the contrary. I repeat, I'm not a nationalist. I just think 'RBS is too big to be in Scotland' is a silly argument for the union.

[Brilliant]

I don't think people are saying that large companies shouldn't be based in Scotland (I for sure do think some banks should be based in Edinburgh as I'm considering doing my masters in St. Andrews), but that within the UK Scottish companies, especially banks, are better protected. If RBS went broke (I certainly don't hope so) the weight of this would be spread across 63 million and not 5.2 million. That is 12 times less of a potential financial burden for normal citizens than in an independent Scotland.

[milton]

Originally Posted by indiekid

It doesn't seem to be Brilliant. A lot of people are starting to get annoyed at the sight of him these days.

Guess every poll being run at the moment has remarkably been consistently asking the wrong people.