Britain clears Lloyds-HBOS merger

LONDON: British business minister Peter Mandelson on Friday cleared a proposed merger between rival banks Lloyds TSB and HBOS, which had been questioned amid the financial crisis, his office said.

According to a statement, he will not refer the planned deal to competition watchdogs because "the possible anti-competitive effects ... are outweighed by the public interest in preserving the stability of the UK financial system.

"I am satisfied that on balance, the public interest is best served by allowing this merger to proceed without a reference to the Competition Commission," Mandelson said.

"I recognise that there are some concerns about the possible effects of the merger on competition," he added in the statement, published by the London Stock Exchange.

Lloyds TSB agreed to buy HBOS in September as the lender faced collapse owing to massive write-downs caused by the US subprime mortgage crisis and resulting credit crunch.

The deal, agreed with the support of the British government, was worth 9.8 billion pounds (12.5 billion euros, 15.8 billion dollars) -- about 187 pence per HBOS share.