HBOS
In a country that is home to some of the world’s best banks, HBOS, born out of the 2001 merger of Halifax and Bank of Scotland, stands out both because of its profitability and impressive growth in the UK market.
Last year’s global economic slowdown and bearish equity markets took their toll on several of HBOS’s bigger rivals. Yet the bank – more dependent on the UK economy, which remained fairly buoyant – was able to eke out a 2% gain in net profit while achieving an ROE of 16.3%. The bank’s cost-to-income ratio also remained low at 45.2%, making it among the UK’s most efficient banks.
The year 2002 also marked a highly successful marketing effort on the part of HBOS’s retail division. This involved a behavioural scoring system and a sales prompt system, which led to hefty increases in sales of personal loans (31%) and bancassurance (66%). This performance, in turn, enabled the retail division to grow profits by 18%.
HBOS continues to benefit significantly from synergies related to the 2001 merger. In 2002, for example, these synergies added Ł209m to the bank’s bottom line and this figure is expected to reach £800m by 2005.
