Lloyds to complete HBOS deal in January

A customer leaves a branch of Lloyds TSB in the City of London, October 13, 2008.

LONDON (Reuters) - Lloyds TSB (LLOY.L) expects to complete its takeover of HBOS HBOS.L and capital raising by January, after giving shareholders a vote on both in the third week of November.

Lloyds said it expects to send a circular on the HBOS deal and its capital raising to shareholders in the first week on November. The meeting to approve both is expected to take place about two weeks after that, it said.

Lloyds stepped in to buy HBOS last month in a government-brokered deal, after its target was hit by a deepening global financial crisis and concerns about its exposure to the weakening housing market.

Both banks were forced to recapitalise under a government plan last week, which will see Lloyds raise 5.5 billion pounds and HBOS raise 11.5 billion.

Shareholders will be offered shares in both banks as part of the fundraising, but if they do not take any the government will end up with a 43.5 percent stake in the enlarged bank.

Lloyds cut its offer price after the bailout and is now offering 0.605 of its shares per HBOS share, down from 0.833 originally.

The deal will create a dominant UK retail bank and should deliver annual cost savings of at least 1 billion pounds.

(Reporting by Steve Slater; Editing by David Cowell)