Financial news of the most dramatic possible kind has the
headlines: HBOS is to be taken over by Lloyds TSB in a deal worth –
at current share prices – £12.2bn. Edinburgh-based HBOS’s shares
had plunged in recent days due to fears over the strength of its
capital base, despite the bank’s insistence that it was sound.
A deal was brokered with help from the UK government – prime
minister Gordon Brown is said to have played a part – in order to
avert another Northern Rock-style fiasco, which would have
undermined confidence in the economy to a perilous degree.
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Competition issues are, for the moment, being swept to one side
by the government as it is seen as more important to “ensure the
stability of the UK financial system”. However, they cannot be
ignored forever, and while the press has so far concentrated on the
mortgage and current account side of the business, the news will
also mean great upheaval in the corporate fleet leasing and
management market.
The newly-merged Lloyds-HBOS will have to decide what to do with
the two fleet businesses it will own: Lex and Lloyds TSB Autolease,
the largest and second-largest fleet operators in the UK.
Combining the two will create an operator with a fleet of
somewhere in the region of 400,000 vehicles – give or take the odd
10,000 or so units.
Quite aside from the purely technical difficulties of
integrating the two fleet operators, there is the not-so-small
matter of staff integration – and blood-letting. As Ken Murray, an
analyst at Blueplanet told the BBC, it is likely that some bank
directors will lose their jobs – the new entity “will not need two
boards of directors”.
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By GlobalDataBut which directors? Jon Walden has, in the past, successfully
integrated huge fleets to create the present-day giant that is Lex
– will Lloyds decide his expertise makes him the right man to
oversee any merger of Lex and Autolease?
What will happen to the displaced staff? After the collapse of
Lehman Brothers, staff clustered in the nearest Costa coffee shop
and immediately started planning new ventures.
We could see the same post-merger, perhaps resulting in new
outfits in broking, or in something new, exciting and
technologically advanced. What is for sure is that any talented and
experienced people who lose their jobs in the shake-out are
unlikely to be lost forever to the world of fleet leasing.
