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Does the merger between Halifax and The Bank of Scotland (HBOS) create value?

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Introduction

Does the Merger between Halifax and The Bank of Scotland (HBOS) create value? Management Research Methods Research Proposal Research Area: Mergers Research Question: Does the Merger between Halifax and The Bank of Scotland (HBOS) create value? Research Objectives: 1. To establish the motives of the merger of HBOS, 2. To determine how successful the Banks have been in terms of profitability post merger, 3. To identify why failures or successes have occurred, 4. To examine whether the merger will help create Britain's 5th Major Bank in particular analysing impacts of the merger on competition in the Banking Industry, 5. To evaluate the impact of the mergers on an individual (management, shareholders, employees and customers) and examining programmes for dealing with separation anxiety for employees. Background I have decided to undertake research about the merger between Halifax and The Bank of Scotland because I had read an article in the Times Newspaper, which was quite interesting and made me want to find out more about the merger. I have also been interested in buying shares for a while now especially in the Banking sector and researching about HBOS will give me some idea of how shares fluctuate in such an industry and whether it would profitable for me to buy shares in the organisation. The UK banking industry has changed dramatically in the past several years. Other financial institutions, such as credit unions, insurance companies, and investment firms, have taken on services that were formerly available only at commercial banks. The banking industry has also embarked on a trend toward consolidation that is expected to continue into the future. Many well-publicised mergers have transformed regional banks into national banking powerhouses. The impact of these bank mergers on shareholders, on the communities involved, and on customers, is significant, and therefore it is important to study their effects. Mergers are considered to be initiated by financial or value maximising motives when the main objective is to increase shareholder wealth and financial synergy through economies of scale, transfer of knowledge and increased control. ...read more.

Middle

Each had an objective of aggressive growth by providing a first-class service to their customers. The newspaper article is necessary to draw conclusions upon the various motives of the banks. The Writer also describes how the Directors have decided to introduce a 'Share Dividend Plan' (Merrell, 05/05/2001: 53) and to offer ordinary shareholders the choice of electing under the Plan to receive the whole of their dividends in new ordinary shares credited as fully paid instead of cash in respect of the proposed final dividend for the year ended 31 December 2001 and for future dividends. In-depth study can be gained from this article concerning the impact of the merger on shareholders. 'The Sunday Times Newspaper' describes how Halifax's strong franchise in savings and mortgages provides 'clear competitive advantages' (Hamilton, 06/05/2001: 3) relative to other retail groups, and the acquisition of the Halifax Equitable sales force in 2001 gives HBOS the opportunity to extend these advantages to its professional and business customers as it moves forward and how Halifax's merger with the Bank of Scotland will pave the way for the creation of the UK's fifth biggest bank. This newspaper article is also going to be accessed to draw conclusions upon the various motives of the banks. D. The Internet The Internet will enable me to access the annual report and accounts of both the companies. The Annual accounts of HBOS are readily available for a period of two years. The financial statements will enable me to assess Halifax and Bank of Scotland's performance before the merger (the website to access Halifax's and Bank of Scotland's annual accounts is http://www.hbosplc.com), when they merged (the year end accounts) and their performance in 2002 to evaluate the financial stability of the company and to predict the future performance and stability of the company. The annual accounts will also be useful to assess share fluctuation (examining the number of shares issued each year and the price of the shares) ...read more.

Conclusion

Problems, which may occur, would be someone else might be using the libraries computer database therefore I would have to reserve it for a specific time and period. Ethical Considerations The Dissertation will involve being aware of several ethical considerations and issues. 1. Confidentiality It is pertinent I respect the confidentiality of the source of any evidence of information that is received from the managers and the employees. This is especially important if there is any question of the evidence having any competitive or commercial sensitivity. 2. Openness with the Managers The Managers in the study will need to know a number of things and to be given a series of assurances. It is imperative I do not have any hidden agendas; to be fully open and honest, the managers will be aware of exactly why the evidence is required and exactly what will be done with it once the research has been completed; where the manager does not wish to have his or her name associated with the evidence, this request will be respected and I will not obtain information from employees under duress. Thus it would not be acceptable for me to have Manager insist that the staff complete the questionnaires if the individual involved do not wish to do so. 3. Plagiarism Ideas of others need to be appropriately referenced. Plagiarism is unethical to the extent of copying large tracts of work without acknowledging the source. 4. Assistance from the tutor The amount of assistance I will receive from the tutor will be extensive in a number of ways, but care needs to be taken so that the dissertation does not become predominantly the work of the supervisor rather than that of mine. 5. Misrepresentation of Work Done It is unethical to exaggerate the amount of work actually done therefore it is necessary to only use data that I have collected. 6. Unacceptability of personal questions Personal questions are unacceptable in questionnaires. Examples of these include issues of age, race, sex and educational standard achieved. Therefore the questionnaires will only consist of questions, which are directly relevant to the merger. ...read more.

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