Lloyds TSB takes over HBOS for $22 billion

Signage is seen at the front of a branch of Lloyds TSB bank  in the City of London September 18, 2008.(Rob Bodman/Reuters)

Alistair Darling, British Treasury Chief, said, "The commercial decision by Lloyds and HBOS to come together is something that we very much welcomed. We were able to facilitate it in relation to the competition rules, which we've just referred to, but I think it was right to ensure the deal went ahead as quickly as possible."

Following the turmoil on Wall Street, investors became increasingly worried that the wholesale funding model of HBOS is unsustainable in the current credit environment.

Intense selling pressure on HBOS shares caused them to fall 20 percent on Wednesday to 147.10 pence.

Lloyds TSB says the rescue deal should save the combined companies one billion pounds, or 1.8 billion US dollars a year, by 2011, and that management will focus on keeping jobs in Scotland, where HBOS is based.

Editor:Du Xiaodan