Lending to continue at current levels and will increase with better economic conditions.

Lloyds TSB has set aside any fears SMEs may have regarding lending made by the soon to be 'super bank'.

In a statement made by Lloyds TSB on the merger Lloyds TSB said that it was their intention, "that new lending by the new combined bank for both UK mortgages and SMEs will continue at least at current levels and will expand as market conditions improve."

The statement also gave details regarding the nature of the deal

Under the terms of the Acquisition, HBOS Shareholders will receive 0.83 Lloyds TSB Shares for every 1 HBOS Share. The offer values HBOS at £12.2 billion (based on Lloyds TSB’s closing price on 17 September 2008 of 279.75 pence).

Existing Lloyds TSB Shareholders will own approximately 56 per cent. of the issued share capital of Lloyds TSB as enlarged by the Acquisition and existing HBOS Shareholders approximately 44 per cent.

The Boards of HBOS and Lloyds TSB believe that the Acquisition is a compelling business combination which offers substantial benefits for shareholders and customers. The Acquisition accelerates Lloyds TSB's stated strategic aim to build the UK's leading financial services company by focusing on growing sustainable earnings streams, based on deep customer relationships.

Meanwhile the Chancellor has welcomed the announcement by Lloyds TSB and HBOS that they have agreed the terms of a proposed merger.

He said this morning that he fully supports the statements made by the Bank of England and the FSA about the importance of this merger to ensure financial stability in the UK in the interests of consumers and the wider economy.
 

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