The Halifax Building Society was a British bank based in the town of the same name in West Yorkshire, England. It was an independent British bank that became a trading division of the Bank of Scotland, which eventually became an entirely owned subsidiary of today’s banking giant Lloyds Banking Group. Even as a subsidiary of a subsidiary, Halifax remains the biggest residential mortgages and savings accounts provider in the United Kingdom. In the 2016 British Bank Awards, it came in fifth in the overall rankings.
Halifax arose as a building society in the year 1853. These societies were organizations which allowed individuals with extra money to invest them in a pool for loaning out money to others who wished to buy or build a house. This particular building society grew into the biggest building society in all of the U.K. by 1913. From this point on, it only continued to expand and financially prosper. It held the number one lending position in Great Britain as an independent company through 1997 when the bank demutualized.
The early history of the Halifax Permanent Benefit Building and Investment Society allowed it to grow into the mortgage lending giant of the twentieth century. The idea became formulated at the Old Cock Inn in a meeting room above it close to where the first building of the Building Society would later be located. Local working people all benefited from the establishment of such a society. Those investors who had extra cash on hand could invest it in the society. They would receive interest payments. Borrowers were then able to apply for and receive loans to allow them to pay for buying a house.
Halifax Building Society did not expand through the typical mergers and acquisitions of other societies of the time. Instead, they grew organically. They began opening up branches all around the United Kingdom. They achieved the status of largest building society in Great Britain by 1913. They opened their first office in London by 1924 and the first locations in Scotland by 1928.
With the demutualization of 1997, the company evolved into a public limited company named Halifax plc. This important entity became a component of the best known London Stock Exchange index the FTSE 100. The company went through another name change in 2001 as it merged with the Bank of Scotland’s The Governor and Company to form HBOS. The company’s long and proud independent history ended in 2006 when an act called the HBOS Group Reorganization Act of 2006 transferred all bank assets and liabilities of the group over to the Bank of Scotland which also became a standard plc company holding Halifax as one of its divisions.
The new group ran into trouble in the financial crisis and had to be rescued. The HBOS began suffering from collapsing stock prices and rampant speculation on its future at the end of 2008. At this point, Lloyds Banking Group intervened and took over both Bank of Scotland plc and HBOS in January of 2009. Lloyds TSB applied to the Court of Sessions which approved them taking over HBOS in a January 12, 2009 ruling. Bank of Scotland along with HBOS officially became a part of the Lloyds Banking Group family on January 19, 2009.
Troubles continued after the merger. The Bank of Scotland announced on February 9, 2010 it would be closing its 44 retail bank branches in Ireland. The deteriorating economic environment and crisis were the reasons Halifax gave out for the closures. In August of that year, they announced that the last business of Bank of Scotland Ireland would be wound down by the conclusion of the year. This resulted from an over $2 billion loss they booked during the first six months of the year because of failed loans they made earlier to property developers.