Swinney signals HBOS support By Colin Donald AFTER ANOTHER week of turbulence in which takeover rumours buffeted the share price of HBOS, Scotland's second largest financial services company, the cabinet secretary for finance has given the strongest signal to date that the Scottish government would intervene to prevent the loss of the 300-year-old bank.
Talking to the Sunday Herald about the troubles a sector central to Scotland's economic strategy, Swinney said that government ministers and officials had maintained a "regular flow of communication" with HBOS management throughout its recent months of trauma at the hands of the City, and that it would "look very carefully and closely" at any challenges to the bank's independence
Swinney said that he "read the newspaper comment like everyone else" and added: "Our priority will be to ensure that the ownership of the organisations is such that it continues to make a significant contribution to the Scottish economy."
While stressing that the Scottish government had no formal powers to block a hostile cross-border bid, and emphasising that he was not speculating about the future of HBOS or any other institution, Swinney said that the Scottish government would "want to ensure that the ownership of the Scottish banks is anchored very firmly here in Scotland."
"Maintaining strong and effective headquarters is in Scotland is one of the things that the administration believes is essential for the stability of the Scottish economy. We will encourage that process as far as we humanly can, " he said.
"If the government feels it necessary to make any representations, then we won't hesitate to do so."
HBOS's share price plunged 17% in March after alleged malicious rumours by short sellers, though an FSA probe reported on Friday that there was "no evidence" of a "concerted attempt" by individuals to profit. Since then HBOS shares have suffered a torrid ride, in recent weeks as persistent rumours - and the denial of those rumours - involving putative bids by institutions such as the US investment bank JPMorgan, and the Spanish banks BBVA and Santander. and even the troubled National Australia Bank group, owner of the Clydesdale and Yorkshire banks.
Ongoing speculation is in defiance of analyst opinion that any takeover attempt amid the current liquidity crisis would be a "long shot".
HBOS's shares ended the week at 302.25p, 11.75 points or 4.04% up, the day after the bank's results showed a better than expected 56% plunge in first-half net profit on Thursday.
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Posted by: Anagol, Edinburgh on 8:46pm Sat 2 Aug 08
As the French government is protective of key companies such as banks in order to preserve French control over key sectors of France's economy, which does not seem to be an unreasonable position to take, I do not see why the Scottish Government should not do what it can to preserve our legitimate national interests in the banking sector in view, not least, of the importance to us of our financial-services industry.
To be a viable economy there are some things which Scotland simply cannot afford to lose. This is not primarily a question, therefore, of what a government should do but of what a government must do.
If the Scottish government's current powers are insufficient to protect the independence of HBOS, pressure should be put on the UK government to do what it has the power to do. If it fails to do so, the SNP will be fully entitled to hold Labour to account on this issue at the forthcoming UK general election. The Scottish electorate, which is already rather peeved with Labour, to say the least, will not forgive it for allowing irreversible damage to what remains of Scotland's economy, although to damage the viability of the Scottish economy may be seen as a legitimate long-term strategy by unionists eager to prevent Scottish independence by all means that they may consider to be necessary. For them the ends justify the means, and for them there is no such thing as a Scottish national interest.
As the French government is protective of key companies such as banks in order to preserve French control over key sectors of France's economy, which does not seem to be an unreasonable position to take, I do not see why the Scottish Government should not do what it can to preserve our legitimate national interests in the banking sector in view, not least, of the importance to us of our financial-services industry.
To be a viable economy there are some things which Scotland simply cannot afford to lose. This is not primarily a question, therefore, of what a government should do but of what a government must do.
If the Scottish government's current powers are insufficient to protect the independence of HBOS, pressure should be put on the UK government to do what it has the power to do. If it fails to do so, the SNP will be fully entitled to hold Labour to account on this issue at the forthcoming UK general election. The Scottish electorate, which is already rather peeved with Labour, to say the least, will not forgive it for allowing irreversible damage to what remains of Scotland's economy, although to damage the viability of the Scottish economy may be seen as a legitimate long-term strategy by unionists eager to prevent Scottish independence by all means that they may consider to be necessary. For them the ends justify the means, and for them there is no such thing as a Scottish national interest.
Posted by: Wullie on 9:38pm Sat 2 Aug 08
The Scottish Government may do doubt be protective of the HBOS.
However, macro economic policy rests with Westminster, and Westminster are most certainly not minded to assist HBOS.
Just look at the Alliance and Leicster, the Abbey National, and the rest to come.
Well done Broon as the better managed continental banks pick off the local crocks.
The Scottish Government may do doubt be protective of the HBOS.
However, macro economic policy rests with Westminster, and Westminster are most certainly not minded to assist HBOS.
Just look at the Alliance and Leicster, the Abbey National, and the rest to come.
Well done Broon as the better managed continental banks pick off the local crocks.
Posted by: rabster, london on 11:40pm Sat 2 Aug 08
It's all very well for John Swinney to say he will do what he can - the reality is that he can do virtually nothing. If a foreign company makes a decent offer for HBOS and the institutional shareholders want to accept, then no politicians in Edinburgh or Westminster will be able to do a single thing about it.
It's all very well for John Swinney to say he will do what he can - the reality is that he can do virtually nothing. If a foreign company makes a decent offer for HBOS and the institutional shareholders want to accept, then no politicians in Edinburgh or Westminster will be able to do a single thing about it.
Posted by: druidEast on 8:45am Sun 3 Aug 08
perhaps,the scotish government can buy a stake in HBOS to support their words.....
perhaps,the scotish government can buy a stake in HBOS to support their words.....
Posted by: colin, Moors of Palencia on 5:07pm Sun 3 Aug 08
It would make sense if Mr Swinney also pointed out the advantages for Scotland of international ownership. BBVA has several nationalities on its board and in senior management. Surely some Scots can see the opportunities?
It would make sense if Mr Swinney also pointed out the advantages for Scotland of international ownership. BBVA has several nationalities on its board and in senior management. Surely some Scots can see the opportunities?
Posted by: Frank, edniburgh on 5:17pm Sun 3 Aug 08
HBOS is culturally Yorkshire and effectively run by English people out of Halifax. It is not been integrated and run by Scots like RBS hence the loyalty factor is lower. In free market the price for managerial incompetence may be a takeover. The SNP can't do anything about it. If they were really serious about keeping FS in Scotland then they would scrap the LIT, which will hit bank workers the hardest. Another example of jingoist incompetence by Swinney and his ilk. So they are now for protectionism? I think you will find that’s in contravention to EU laws on state interference
HBOS is culturally Yorkshire and effectively run by English people out of Halifax. It is not been integrated and run by Scots like RBS hence the loyalty factor is lower. In free market the price for managerial incompetence may be a takeover. The SNP can't do anything about it. If they were really serious about keeping FS in Scotland then they would scrap the LIT, which will hit bank workers the hardest. Another example of jingoist incompetence by Swinney and his ilk. So they are now for protectionism? I think you will find that’s in contravention to EU laws on state interference
Posted by: Scamp on 10:01pm Sun 3 Aug 08
Anagol makes the usual mistake of assuming that HBOS is actually of any real benefit to Scotland beyond things like local employment.
HBOS is not like a German, French or Scandinavian bank. They tend to support and help nurture indigenous industry. HBOS couldn't care less about Scotland.
Its main shareholders are fund managers in the City and their entire purpose in life is to make as much money as they can as fast as they can. If then a French or any other bank came along and offered them a sensible price they'd take it.
What we need in Scotland is a new bank that thinks and operates in Scotland's interest.
Anagol makes the usual mistake of assuming that HBOS is actually of any real benefit to Scotland beyond things like local employment.
HBOS is not like a German, French or Scandinavian bank. They tend to support and help nurture indigenous industry. HBOS couldn't care less about Scotland.
Its main shareholders are fund managers in the City and their entire purpose in life is to make as much money as they can as fast as they can. If then a French or any other bank came along and offered them a sensible price they'd take it.
What we need in Scotland is a new bank that thinks and operates in Scotland's interest.
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