Hewitt nod to merger of Halifax and BoS

TRADE Secretary Patricia Hewitt today gave her blessing to the agreed 28 billion merger of Halifax and Bank of Scotland, writes Joanne Hart.

Acting on advice from the Office of Fair Trading, Hewitt said the proposed merger does not need to be referred to the Competition Commission.

"Unlike the proposed Lloyds TSB-Abbey National merger, this merger does not involve one of the Big Four banks and the removal of a competitor.

In fact, it may strengthen the competitive pressures on the Big Four," she said.

Shareholders in Halifax and Bank of Scotland are being asked to vote on the deal early next week. Halifax said: "We are very pleased with Patricia Hewitt's decision. Ours is a pro-competition deal and we intend to make life difficult for the Big Four."

If shareholders approve the transaction, it is intended to complete in mid-September.

Under the terms of the deal, Halifax chairman Lord Stevenson will retain his role at the enlarged group, as will Halifax chief executive James Crosby.

BoS chief executive Peter Burt is to become deputy chairman but will stand down once the merger is effected.

Hewitt blocked Lloyds' acquisition of Abbey National on the grounds that it would have an adverse impact on the current-account market and the small-business sector.

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