Bank of Scotland and Halifax announce £28bn merger

Bank of Scotland and the Halifax have agreed a £28bn merger to create Britain's fifth largest bank.

Both banks maintain their own names and continue trading as separate institutions under a new holding company HBOS.

It marks a third time lucky for Bank of Scotland, which has previously been jilted by two merger targets, including, most recently, Abbey National.

The board of directors for the new bank will be drawn equally from the Boards of the Halifax and Bank of Scotland.

HBOS corporate headquarters will be in Edinburgh, with business divided between England and Scotland. Retail and long-term insurance and long-term savings based in Halifax and Corporate Banking and Business Banking will both be based in Edinburgh.

Group chief Executive of Bank of Scotland Peter Burt said: "'There is an exceptional fit between our two groups - we have complementary businesses and shared strategies and cultures.

"Not only will this merger accelerate the existing prospects of both groups, it will also deliver significant additional opportunities for growth."

Halifax chairman Dennis Stevenson will chair the combined group, while BoS chief executive Peter Burt will become full-time deputy chairman.

Halifax chief executive James Crosby becomes group chief executive.