Halifax (United Kingdom bank)
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| Type | Trading Name |
|---|---|
| Industry | Finance and insurance |
| Founded | 1853 |
| Headquarters | Halifax, West Yorkshire, England |
| Key people | David Nicholson (managing director) |
| Products | Financial services |
| Parent | Lloyds Banking Group |
| 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. 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 de-mutualised in 1997 becoming Halifax plc and later merged with The Governor and Company of the Bank of Scotland and formed a holding company HBOS. In 2006, the HBOS Group Reorganisation Act 2006 transferred the assets and liabilities of Halifax to Bank of Scotland which became a standard plc . Halifax then became a trading name of Bank of Scotland. A takeover by Lloyds TSB was approved by the Court of Session on 12 January 2009 - on the 19 January 2009, Bank of Scotland formally became part of Lloyds Banking Group.
The Company was once a constituent of the FTSE 100 Index.
On 16 October 2009, Halifax Estate Agency was sold to LSL Properties for a fee of £1. The branches were renamed as one of LSL's existing brands, Reeds Rains.[1]
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[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
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 foam 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
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 name, but it no longer exists as a legal 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" related to its property portfolio[citation needed]. Bank of Scotland plc (including its brands such as Halifax) became a wholly owned subsidiary of the Group.
[edit] TV adverts
In 2000, Halifax began a long-running advertisement campaign featuring staff singing popular songs with the words changed to reflect its financial services products. Halifax worker Howard Brown was the first and most frequently featured star of these adverts.
Following the merger with the Bank of Scotland, this practice 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 was first shown in February 2007.
Another advert filmed stars Thomas Yau from Leeds singing a version of Herman's Hermits "I'm into Something Good". This advert was first shown in January 2008. This campaign was dropped in August 2008,[7] but the bank has continued to feature its staff in advertisements.
Later in January 2010 and 2011 an advertisement with a faux "radio show" featuring Sarah Applewood, became its focus. The advert, which was described in the UK's newspaper The Sun as 'Xcruciating' [8] claims it will help its customers by giving them £5 per month if they deposit at least £1,000 each month. The Halifax was accused of misjudging the mood of the nation after receiving a £25 billion pound bailout.[9]
[edit] 2009 power failure
On 14 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 Copley, West Yorkshire [1] which caused several problems for Halifax's banking system. Halifax's online banking system did not recover from the power failure for several hours.[10]
[edit] Changes to accounts
[edit] 2009 current account changes
In February 2009, Halifax made significant changes to its current accounts. From February 2009, all new current accounts had zero credit and debit interest, along with no paid and unpaid item charges (which were previously up to £35). Instead, all Halifax current account holders 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. Credit interest has been replaced by a £5 net payment every month. These changes were implemented to all current account customers (except Student accounts) from December 2009.
These changes caused a great deal of media attention at the time of the change,[11] with Martin Lewis and consumer magazine Which? urging 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.[12][13] However, this has had little adverse effect on attracting new custom, with around 1.2 million new accounts opened during 2009, the highest number of any UK bank[citation needed].
Halifax made further bank and savings account changes on 1 November 2010 to make one simple, efficient system to take effect from 20 March 2011.[14].
[edit] Halifax changes to a clearing bank
As of December 2010, Halifax has become a clearing bank, meaning that it can now accept Bank Giro Credits. This has led to major changes in counter services in Halifax branches, requiring paying and withdrawal slips to be completed to carry out transactions. The implementation of Bank Giro Credits will be phased by branch and will take around six months to complete. Halifax is also planning to introduce Chip and PIN machines at its branches' counters as part of these changes.
[edit] See also
[edit] References
- ^ Halifax estate agents sold for £1 BBC News Online. 16 October 2009
- ^ a b c d e f g h i HBoS: Halifax History
- ^ A $60bn bonanza for Britons
- ^ BoS and Halifax agree merger
- ^ Bank of Scotland (Ireland) to become Halifax
- ^ HBOS Group Reorganisation Act 2006
- ^ Knapton, Sarah (7 August 2008). "Halifax's Howard dropped as downturn bites". London: The Daily Telegraph. http://www.telegraph.co.uk/news/newstopics/celebritynews/2515362/Halifaxs-Howard-dropped-as-recession-bites.html. Retrieved 2010-02-01.
- ^ Rollings, Grant (13 January 2010). "We rate the most annoying Halifax adverts ever". London: The Sun. http://www.thesun.co.uk/sol/homepage/features/2805699/We-rate-the-most-annoying-Halifax-adverts-ever.html. Retrieved 2010-01-23.
- ^ "Readers give thumbs down, not high five to Halifax". London: The Daily Telegraph. 19 January 2010. http://www.telegraph.co.uk/finance/personalfinance/comment/paulfarrow/7024345/Readers-give-thumbs-down-not-high-five-to-Halifax.html. Retrieved 2010-01-23.
- ^ Power failure hits HBOS - BBC
- ^ HBOS overdraft fees criticised
- ^ http://www.moneysavingexpert.com/news/banking/2009/10/how-to-beat-halifaxs-overdraft-chagres How to beat Halifax's overdraft charges
- ^ http://www.bankingtimes.co.uk/31102009-halifax-bank-of-scotland-retreat-on-overdraft-charges/ Halifax / Bank of Scotland retreat on overdraft charges
- ^ Halifax: Changes to bank and savings accounts
[edit] External links
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