Customers worry as HBOS stock drops

17/09/2008

Customers of HBOS, Britain's largest mortgage and savings firm, are facing worrying times.

Doubts over the lender's financial position has led to it suffering sharp falls on the stock market so far this week.

Yesterday, the value of HBOS shares fell by 22 per cent on the FTSE 100 exchange - making it by far the biggest faller for the day.

At one point, it was even trading at almost 40 per cent below Monday's level.

Despite these worrying falls, it is unlikely that the government will allow the bank to fail - in part, because the cost of bailing out HBOS customers through compensation schemes would be astronomical.

For its part, HBOS said that it was in a strong financial position - and its share price was also boosted today by confirmation that it is in takeover talks with rival Lloyds TSB.

In a statement, the firm claimed to have "very satisfactory" funding - meaning that it can get its hands on easily-accessible cash.

"The credit crunch has been going on for over a year, and during that period we have demonstrated the sheer resilience of our funding franchise," it added.

Tags; Debt Management and Banking, Young Family Finances, Retirement Money Problems, Credit Card Lifestyle, Recent Graduate Debt,

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