Shareholders left counting cost of banking mergers made in hell
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OTHER recent banking mergers from hell include:
RBS/ABN Amro
Royal Bank of Scotland tops the list of disastrous mergers through its lead role in the consortium that took over Dutch financial giant ABN Amro for €71bn in late 2007.
The scale of the damage caused was evident as RBS last year wrote down some £16.2bn (€18.7bn) of toxic assets arising from the takeover.
It drove the once-proud Scottish group into an annual net loss of £24bn -- the biggest shortfall in British corporate history.
The UK government now owns 70pc of RBS, the parent company of Ulster Bank, after pouring £20bn into the stricken institution last year.
The bank's new chief executive Stephen Hester -- in trying to sort out the mess created by his predecessor Fred 'The Shred' Goodwin -- has dumped some of the assets acquired as part of the deal into a "bad bank" of non-core assets for disposal as part of a massive restructuring.
Lloyds/HBOS
Eager to prevent the collapse of HBOS last September, UK Prime Minister Gordon Brown waived competition rules to rush through an emergency takeover of the Edinburgh-based lender by Lloyds.
Massive HBOS losses served to destabilise Lloyds, which was previously one of the more robust UK lenders, and forced the London government to take a 43pc stake in the group. HBOS owns Halifax-Bank of Scotland (Ireland).
Lloyds' annual general meeting (AGM) tomorrow is set to be a particularly stormy affair, and investors are expected to vent their anger over the value-destroying deal.
Shares in Lloyds have plummeted since it went through.
In order to avoid an outright revolt, Lloyds' chairman Victor Blank, the architect of the ill-fated takeover, recently signalled that he will stand down before next year's AGM.
- joe brennan
