HBOS may cut 9,000 jobs if it wins Abbey

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The Independent Online

An HBOS branch nestles within a quarter of a mile of more than 70 per cent of Abbey National's 741 branches, it emerged yesterday. That stokes fears that should HBOS emerge victorious from a battle for its biggest rival in the mortgage market, massive job losses and branch closures are sure to follow.

An HBOS branch nestles within a quarter of a mile of more than 70 per cent of Abbey National's 741 branches, it emerged yesterday. That stokes fears that should HBOS emerge victorious from a battle for its biggest rival in the mortgage market, massive job losses and branch closures are sure to follow.

Abbey has agreed to a bid worth north of £8bn from Banco Santander, and the Spaniards have already sounded out a British retail banker to replace Luqman Arnold, Abbey's chief executive, next summer.

But HBOS is widely tipped to crash Santander's party next month. Many Abbey shareholders are thought to favour a sale to a British bank. And HBOS, formed by the merger of Halifax and Bank of Scotland in 2001, is seen as best placed to make huge savings from a tie-up with Abbey.

With so many Abbey and HBOS branches cheek by jowl, experts reckon deep cuts inevitable. One banking analyst said: "How can HBOS run two small branches with competing brands, under the same ownership, in all the small towns and shopping centres? These are banks not pubs."

There is an HBOS branch within 160 metres of half of all Abbey's branches. HBOS could wring £600m cost saving from Abbey and axe up to 9,000 jobs, banking sources say.

But widescale job losses and branch closures would certainly face tough opposition from unions and politicians. An HBOS spokesman said: "It's extremely premature to talk about branch closures. There's only one deal on the table and the Spanish bank has so far declined to give stakeholders any clue to possible job losses."

HBOS, headed by James Crosby, said similar concerns over job losses in Scotland after the 2001 merger proved groundless. The bank now employs 2,500 more people there.

HBOS bosses will fly to the US next month to meet Brandes Investment Partners, Abbey's biggest shareholder. The Californian investor holds 8.67 per cent of Abbey shares, and would play a crucial role should HBOS launch a counterbid.

The country's biggest mortgage lender is understood to have also sounded out the kind of financing that it could secure on the international money markets, and at what cost.

Abbey shares crept a penny higher to 584.5 yesterday.

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