Eric Daniels, chief executive of Lloyds TSB, was clear yesterday that the takeover of HBOS would create a superb banking franchise. 'I rarely use superlatives but this is really a wonderful combination,' he said.
Lloyds has weathered the credit crunch far better than any of its rivals thanks to Daniels’ cautious, risk averse business model.
But there is a big question on whether the deal, which creates a dominant force in everything from current accounts and mortgages to life assurance, also just transfers HBOS’s risks to Lloyds.
Fitch, the rating agency put HBOS and Lloyds on rating watch negative saying its action reflected concerns over the potential impact of Lloyds owning lower-rated HBOS.