Halifax

Type	Trading Name
Founded	1853
Headquarters	Halifax, West Yorkshire, England
Industry	Finance and insurance
Products	Financial services
Parent	Lloyds Banking Group plc
Website	www.halifax.co.uk

Halifax is a trading name of Bank of Scotland, itself a subsidiary of Lloyds Banking Group. In the United Kingdom, the Halifax is used as brand for Bank of Scotland branches in England, Wales and Northern Ireland and for savings and mortgages in Scotland. Halifax is the UK's largest provider of residential mortgages and saving accounts. It is named after the town of Halifax, West Yorkshire where it retains its headquarters. Its slogan is "A Little Extra Help".

Before 17 September 2007, Halifax was a separate bank. It was previously the UK's largest building society, known as the Halifax Building Society. The Halifax Building Society demutualised in 1997 becoming Halifax plc and later merged with The Governor and Company of the Bank of Scotland to form HBOS Group. In 2006, the HBOS Group Reorganisation Act 2006 transferred the assets and liabilities of Halifax plc to Bank of Scotland plc (Halifax was retained as a trading name). On 19 January 2009, Bank of Scotland plc became part of Lloyds Banking Group following its acquisition of HBOS.

The Company was once a constituent of the FTSE 100 Index.

On the Friday 16th of October 2009, Halifax Estate Agency was sold to LSL for a fee of £1. The branches are to be renamed as one of LSL's existing brands.^[1]

[edit] History

[edit] Formation

The Halifax was formed in 1853 as the The Halifax Permanent Benefit Building and Investment Society. The idea was thought up in a meeting room situated above The Old Cock Inn close to the original Building Society building.^[2] Like all early building societies, the purpose of the Society was for the mutual benefit of local working people. Investors with surplus cash would invest in the society to receive interest, and borrowers could access loans to fund the purchase of a house.

Unlike many UK building societies which grew large by acquisitions and mergers, the Society choose an organic form of growth, and proceeded to open branches throughout the UK. By 1913, it was the largest building society in the UK.^[2] The first office in London opened in 1924;^[2] and the first offices in Scotland in 1928.^[2]

[edit] Halifax Building Society

The former headquarters of the Halifax in Trinity Road, Halifax, West Yorkshire.

In 1928, it merged with Halifax Equitable Building Society,^[2] then the second largest building society and was renamed Halifax Building Society. The Society was now five times larger than its nearest rival, with assets of £47 million.^[2]

A new Head Office was built at Trinity Road, Halifax in 1973.^[2] The distinctive diamond shaped building was used on marketing material during the 1980s and 90s. Underneath the building is a specially constructed deedstore which is used to store property deeds for a one off charge of £10. It is computerised and filled with gas to prevent fire. Its importance has diminished in recent years because property data is now kept on a central database kept by Her Majesty's Land Registry.

[edit] Diversification

The Society continued to grow in size throughout the 20th century, remaining the UK's largest building society. The deregulation of the financial services industry in the 1980s saw the passing of the Building Societies Act 1986 which allowed societies greater financial freedoms, and diversification into other markets. Accordingly the Halifax acquired an estate agent to complement its mortgage business. It also expanded by offering current accounts and credit cards, traditionally services offered by commercial banks.

[edit] Demutualisation

The 1986 Act also allowed building societies to demutualise, and become public limited companies instead of mutually owned organisations, owned by the customers who borrowed and saved with the society. Although the Abbey National demutualised in 1989, the process was not repeated until the late 1990s, when most of the large societies announced demutalisation plans. In 1995, the Halifax announced it was to merge with the Leeds Permanent Building Society and convert to a plc. The Halifax floated on the London Stock Exchange on 2 June 1997.^[2] Over 7.5 million customers of the Society became shareholders of the new bank, the largest extension of shareholders in UK history.^[3]

[edit] Halifax plc

A high-street branch of the Halifax.

Neighbouring Halifax and Lloyds TSB branches outside the Arndale Centre, Cross Gates, Leeds.

As Halifax plc, the new bank was the fifth largest in the UK in terms of market capitalisation. Further expansion took place with the 1996 acquisition of Clerical Medical Fund Managers, a UK life insurance company. In 1999, the Halifax acquired the Birmingham Midshires Building Society^[2] and ComparetheLoan. In 2000, Halifax established Intelligent Finance, a telephone and internet based bank.

[edit] Formation of HBOS

In 2001, a wave of consolidation in the UK banking market led Halifax to agree a £10.8 billion merger with the Bank of Scotland.^[4] The new group was named Halifax Bank of Scotland (HBOS) with headquarters in Edinburgh, but retaining both Halifax and the Bank of Scotland as brand names. However in Scotland, Halifax branches were amalgamated with the Bank of Scotland, and the Halifax brand is now only used for branding mortgages and savings products. Halifax branches in the rest of the UK use the Bank of Scotland brand for business banking. In 2006, the opposite occurred when the Bank of Scotland (Ireland), HBOS's main retail bank in the Republic of Ireland, announced that it would be rebranding its retail business as Halifax, citing the Irish public's exposure to Halifax advertising on ITV as among the reasons.^[5] The Bank of Scotland name was to be retained for business banking.

In 2006, the HBOS Group Reorganisation Act 2006 was passed. The aim of the Act was to simplify the corporate structure of HBOS. The Act was fully implemented on 17 September 2007 and the assets and liabilities of Halifax plc transferred to Bank of Scotland plc. The Halifax brand name was to be retained as a trading style, but it no longer exists as a corporate entity.^[6]

[edit] Lloyds Banking Group

HBOS was acquired by the Lloyds Banking Group in January 2009 amid falling share price and speculation as to its future. The group was thought to have been heavily leveraged with "toxic debt". Bank of Scotland plc and all its brands including Halifax became a wholly owned subsidiary of the Group.

[edit] TV adverts

Halifax pioneered an innovative approach to bank adverts in 2000, when it allowed its staff to star in adverts, singing popular songs with the words changed to reflect financial services products. Halifax worker Howard Brown is the regular star of the adverts. Following the merger with the Bank of Scotland, this practice has continued, with the Bank of Scotland also allowing its staff to take part.

In December 2006, Natalie Webster and four other Halifax colleagues Richard Willoughby, Jilly Ellard, Nicola Roberts and Paul Dudley, flew to Johannesburg to film the 'Halifax remix' of Aretha Franklin's "Think". The advert has been on air since February 2007. Another advert filmed stars Thomas Yau from Leeds singing a version of Herman's Hermits "I'm into Something Good". This advert has been on air since January 2008.

[edit] 2009 Power Failure

On the 14th November 2009, HBOS was hit by a power failure which affected all branches, cash machines and online banking. The bank said that the power failure occurred at an IT centre in Yorkshire which caused several problems for Halifax's banking system. Halifax's online banking system didn't recover from the power failure for several hours.^[7]

[edit] 2009 Overdraft Charges

In November 2009, Halifax notified all its customers that there would be a significant change to its overdraft fees. From the 6th December 2009, Halifax current account holders will pay £1 per day for being overdrawn by up to £2500 within an arranged overdraft, and £2 per day for over £2500. For unarranged overdrafts the fee is £5 per day, but all paid and unpaid item fees (which were previously up to £35) have been scrapped. These changes have caused a great deal of media attention and customer complaints. ^[8]. Finance commentator Martin Lewis and consumer magazine Which? has urged Halifax customers to keep their accounts in credit wherever possible, or consider moving their accounts to an alternative bank, in response to the new charges. ^{[9] [10]} In conjunction with the change to its overdraft fees, they are replacing credit interest on current accounts with a fixed £5.00 net payment every month.

[edit] See also

• Halifax (Irish bank)

[edit] References

[edit] External links

• Halifax
• Bank of Scotland plc
• Lloyds Banking Group