spunkmaster

FOR Scotland's oldest bank, it was the suddenness of its rout that stunned. That and the silence at the top. That and the invisibility of leadership. That and the short-selling frenzy that descended on HBOS shares yesterday, like vultures on a corpse.
This was the blackest day in Scottish banking. An appalling day of shock, confusion and disbelief.

Many this morning will still be aghast at the speed of the bank's share collapse. Anger and a reckoning will come later. Today, the fate of HBOS, the savings of its 22 million customers, the prospects for its 72,000 staff and the final reckoning for its 1.2 million hapless investors ? whose shares have been savaged ? rest on the merger with rival Lloyds TSB.

Yesterday, in conditions of near pandemonium, shares in HBOS had by far their worst day since the onset of the credit crisis. Monday and Tuesday were train-wreck enough ? the value of HBOS had plunged by £7 billion by Tuesday night. So there was a surge of relief when the shares opened firmer at the start of trading yesterday. It did not last long.

The shares opened at 200p, rose to 214p, then plunged to only 88p ? an astonishing collapse of 56 per cent in less than an hour. Then came reports of "advanced" merger talks with Lloyds TSB, at a price of 300p a share.

The shares rallied ? only to fall back again. Amid ever-growing confusion in the market, the mooted bid terms were now corrected ? to 200p a share.

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