How HBOS was brought down
However this appalling day is written, the one word that did for HBOS was confidence - or the lack of it.
Britain's biggest mortgage lender - a retail bank with 22 million customer accounts - and one of the proudest names in Scottish banking - has been brought to its knees by the worst financial crisis since The Great Crash of 1929.
It threatens the end of one of the most honourable and distinguished names in Scottish banking. Bank of Scotland was one of the features that defined Scotland and Scottishness. To see it blasted away in this financial hurricane is an appalling sight.Customer deposits look to be safe and staff in HBOS branches have been doing their best to maintain a "business as normal" facade.
>
After the steepest share price collapse in its history as a public company, a report that it was in "advanced talks" with Lloyds TSB brought a ragged rally.
In the absence of any confirmation, no-one knows for sure how "advanced" these talks are, or whether they will have a result. But such has been the flight of confidence, the absence of a result would be too awful to contemplate.
The rumoured price was first reported as 300p a share. That was later adjusted down to 200p.
Neither Lloyds TSB nor HBOS could be drawn to comment on these rumours - and that for some was as good as a confirmation.
But dealings in HBOS shares have not so far been suspended. And that's normally the first thing that happens in any serious take-over approach.
For talks to be "advanced" they must have been going on for weeks. And HBOS has to act rapidly today if it is to avoid a Northern Rock debacle on a massive and utterly uncontrollable scale - anxious customers queuing outside the branches to withdraw their savings. That is what the the government, the Bank of England and the Treasury are now desperately scrambling to avoid.
What has been striking over the past few days has been the absence and the silence of leading figures at HBOS. The report that the bank is in take-over talks with Lloyds TSB may explain this. Bank officials are prevented by keenly enforced regulation from saying anything in public that could be misleading or create a false market in the shares. But the absence of leadership - just when people have been looking for reassurance - has been remarkable.
When I spoke to a senior HBOS manager this morning he told of anxious high net worth customers phoning up to ask if their money was safe. Others have been withdrawing their savings portfolios. And if the "high end" had got the shakes, the mass of 22 million customers will not be far behind.
The share price collapse of HBOS - doubtless fuelled by massive short selling - has torn the last vestige of confidence from the bank as we know it.
Shares in HBOS are held by 1.2 million people - it is the most widely held share in Britain. And many thousands of HBOS staff will have seen their savings all but wiped out as the shares spiralled down. Now they face huge uncertainty over their jobs in any merger.
Fresh developments are now anxiously awaited. Watch this space.
