Thursday, September 18, 2008
Create a larger Bank and create a greater funding requirement
Shares in Lloyds TSB fell in morning deals as analysts fret about the risks inherent in the merger with HBOS. Market watchers fear the deal may take much longer to push through than hoped - distracting the management team from the key business of navigating the current market turmoil.Numis analysts said the bid does not solve the problem of structural weakness in the UK economy and what they think is likely to be a severe recession for eighteen months. 'The deal just creates a larger group with an even greater funding requirement,' they said.