The FTSE fell to its lowest point since 2005, following a horrific day on Wall Street which saw the DJIA drop 449. On the FTSE for September 18, 2008, Lloyds TSB was flat, while HBOS sank. HSBC and Royal Bank of Scotland lost 4.6 and 10.4 per cent respectively. British bank Lloyds TSB is in advanced talks to buy domestic rival HBOS, HBOS said, to create a £28 billion mortgage giant.

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HSBC’s Guyerzeller unit will lose its name and will be known as HSBC Private Bank (Suisse) SA, which is already the name of a second unit. The two units currently employ 2,000 people and have assets under management of CHF 190 billion. When HSBC contemplated buying UBS and others, somebody probably pointed out that streamlining would be a good idea. Two units with different names made no sense.

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HSBC is interested in HBOS but does not want to pay for it. Perhaps HBOS should pay HSBC for the “high honor” of HSBC’s interest? According to a report on website www.Telegraph.co.uk, Lloyds TSB Group is in talks to acquire HBOS, Britain’s biggest mortgage lender. The article says the prime minister has had several conversations with Lloyds chairman Victor Blank about a deal in recent days, citing a source close to the matter, and that HSBC is also interested in a potential takeover but is unwilling to pay anything for HBOS shares. Lloyds is unlikely to pay any more than 2 euros per share, the Telegraph wrote.

In a lesson plan, designed to teach about predatory and subprime lending, we asked this question of students in 2005: “What is the impact on a country’s economy if predatory lending is left unchecked?” Three years later the answer is clearly obvious. As of today the world has seen over $515 billion (USD) in write-offs and markdowns. Not only was predatory lending unchecked, but it became the mainstream. Predatory lending, which was a big part of the subprime debacle, became the accepted norm. Unfortunately the error was identified too late to stop the damage.

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Here is breaking news from Saudi Arabia involving HSBC and the Bin Laden family. The Saudi Binladin Group successfully completed the issuance of a privately placed SAR Sukuk of finance raising more than SR1bn from the capital markets in Saudi Arabia. This is the Saudi Binladin Group’s first go at the Saudi debt capital markets. HSBC Saudi Arabia was the sole Lead manager and bookrunner for the issuance.

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