Bouncing shares for HBOS

Date Posted: 24 July 2008

HBOS, which owns Halifax and Bank of Scotland, witnessed a turbulent July. The UK's top mortgage lender, tried to persuade investors to buy new shares in the business in an effort to raise capital.

When HBOS announced the rights issue, its shares fell by 7pc and fears for the financial institute rose. Experts predicted that shareholder support for the bank's £4bn rights issue would be lukewarm amid concerns about its falling share price. Only 8.29% of the new shares offered in its rights issue were taken up. However, HBOS said it will still get the £4bn, as the unsold new shares will be purchased by the issue's underwriters.

A few days later HBOS shares soared by 17% as a result of a rumour of a potential takeover by BBVA, Spain’s second largest bank.

BrandIndex ‘Buzz’ scores do not show a remarkable change for Halifax. Its ‘Buzz’ moves between 0% and -2% during July. Bank of Scotland’s ‘Buzz’ moves between -4% and -6% however the scores seem to recover after the 22nd of June.

BrandIndex will follow the banks’ scores with attention.

Agi Zabo, BrandIndex Research Executive

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