'Super bank' will continue SME lending

Lending to small to medium enterprises (SMEs) will continue at current levels after the Lloyds TSB-HBOS merger.

That's according to Lloyds, which has moved quickly to dispel any fears that lending rates could see sharp increases after the formation of the 'super bank'.

The Chancellor of the Exchequer, Alistair Darling, yesterday (18 September) welcomed the agreement of the merger, which he believes will help ensure UK financial stability.

In a statement, Lloyds TSB said: "Lending by the new combined bank for both UK mortgages and SMEs will continue at least at current levels and will expand as market conditions improve."

Lloyds also revealed further details of the deal between the two lenders, reporting that HBOS stockholders will receive 0.83 Lloyds TSB shares for each HBOS share.

The total valuation of HBOS according to the offer is £12.2 billion, based on the 17 September closing share price of 279.75p.

Research published earlier this month found that bank lending to SMEs had continued to increase despite the onset of the credit crunch.