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 | | Monday, 10 September, 2001, 11:38 GMT 12:38 UK HBOS shares rise on debut  The new bank will "deliver significant additional opportunities for growth" Shares in HBOS, the bank formed from the �30bn merger of Halifax and Bank of Scotland bucked the market and rose on their first day of trading. While the FTSE 100 plunged 2.84% and most bank stocks joined in, HBOS shares were up 6.5 pence to 838p by 12.04 BST (11.04 GMT) from 831.5p. The shares are "a safe bet for those with nervous dispositions", according to Huge Pye, banking analyst at BNP Paribas, pointing to the bank's strong market share in retail banking and savings. As a result, HBOS runs less risk of bad debt in an economic slowdown than banks which are stronger in business banking, he said. Targetting business HBOS has 25 million customers and 20% of the UK mortgage market as well as being Britain's biggest savings institution.
HBOS plans to recruit 500 new staff as part of its plans to target the small business banking market. The company is aiming for 5% of the market in small business banking. "It's a big market to break into and we intend to shake it up", HBOS chief executive James Crosby said. The new business banking operations will be run by Colin Matthew, head of business banking at Bank of Scotland. The service will be based in branches and backed up by call centres. The merged group is also aiming to cut about 2,000 jobs to produce annual savings of �305m over three years. Banking analysts expect HBOS shares to fare well, setting a price range forecast over the next 12 months of between 750 pence and 1,035p. But they also cautioned that HBOS will find it harder to make its cost savings target in an economic slowdown. "One of the problems is that the benefits are not expected to come in before 2004 and in the meantime we have to get through the current downturn", said Anik Sen of ABN Amro. Teather & Greenwood cut its recommendation on the HBOS to 'hold' from 'buy' for the same reason. | |
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