HBOS shares slump as mortgage crisis continues

HBOS shares fell by more than 10 percent on Tuesday, another sign that shows that the Lloyds TSB takeover will not solve its funding problems with another downward slide in mortgage lending analysts say that they are still concerned.

The HBOS share price was down 11.5 percent at 185p by 9.15 GMT on Tuesday, valuing its offer at 212p per HBOS share. This comes as reports show that UK mortgage approvals for house purchases fell 64 percent in August from last August which is a record low.

Britain’s largest home lender HBOS was taken over last week by Lloyds TSB. Although analysts fear that not all shareholders will agree with the takeover which needs 75 percent approval, and there are increasing concerns that the Federal Government bail-out plan may lead to more trouble.

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