As I predicted on Saturday, HBOS has got caught up in the global mortgage meltdown. Bloomberg reports:
HBOS Plc, the U.K.’s biggest mortgage lender, will sell 4 billion pounds ($8 billion) of shares to bolster capital depleted by asset writedowns and a deteriorating housing market.
As the UK housing market has only begun to turn down and the Halifax (which represents the H in HBOS) is the largest mortgage lender in the UK, you can expect a lot more of this in the months ahead. In the face of similar headwinds, many U.S. banks have cut the dividend. Will British banks follow their lead?
Read the Bloomberg article here.
See also: Credit Crisis Timeline for a full list of writedowns and capital raising by institution and a timeline of the credit crunch.