Trustees to the HBOS Pension Scheme have abandoned their plans for a legal challenge to the bank’s acquisition by Lloyds TSB, after management persuaded them they could be imperilling the group’s future.

In a statement, the trustees said they had decided not to proceed with a challenge to the Scheme of Arrangement under which the acquisition is to take place, having been persuaded that doing so would threaten the bank’s planned capital raising exercise.

Financial Times