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'We will weather the storm' say HBOS chiefs
BOSSES at the Halifax today assured investors and staff the bank can ride out the storm as shares in the company plunged.
After the collapse of Amercan giant Lehman Brothers, banking shares across the word tumbled – but the Halifax fared worst, losing nearly 40 per cent of its value in two days.
Many analysts blamed speculators seeking quick profits by effectively betting on the bank's share price falling
HBOS shares rallied slightly to close at 182p last night – down 50.5p from the morning's opening price.
Royal Bank of Scotland and Barclays shares also dipped.
But Shane O'Riordain, spokesman for the Halifax, said the bank was strong enough to weather the storm.
He said: "Following events in the US in the last few days, world stock markets, including UK bank stocks, have experienced significant volatility.
"As the UK's largest savings institution, the Halifax has 258 billion of deposits. During the ongoing credit crunch, the group's savings franchise has delivered a resilient performance – deposits grew by 12 per cent in the first half.
"The group continues to access the wholesale money markets where appropriate.
"The Halifax has taken a cautious view on the outlook for securing markets for some time and has adapted its business plan accordingly. That's why the group's objective is to grow deposits faster than assets.
"The Halifax has a strong capital base. The group has the strongest capital ratio, a key measure of financial strength, of all the major UK domestic banks. It is a strong bank."
HBOS employs over 6,000 staff in Calderdale and more than 60,000 in the UK.
Angela Riley, of Riley and Co accountants, Halifax, said it was worrying such a stable bank was feeling the brunt.
She said: "It's a really strong company with a really good balance sheet. It's a really well-run company and such a major employer.
"You just can't believe that this global instability is catching such a good company in the crossfire. It's frightening that a good company like this can even be affected."
The former president of West Yorkshire Society of Chartered Accountants added: "It's grossly unfair. As far as I know it hasn't indulged in excesses – such as Northern Rock which got involved in risky business in order to increase its market share."
She said the current global economic mess was due to too much consumer borrowing being readily available.
The FTSE 100 Index plunged to its lowest level for more than three years.
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Weather for Halifax
Saturday 11 February 2012
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