HBOS pension fund drops move to delay Lloyds deal

LONDON (Reuters) -The trustees of the HBOS pension fund said they have dropped plans to delay the bank's takeover by rival Lloyds until they receive guarantees the retirement scheme will be adequately financed.

The trustees said on Thursday they had decided not to go ahead in order to avoid jeopardising capital raising programmes planned by both banks next week.

"Having carefully considered the repercussions of any delay, and in view of helpful statements made by Lloyds TSB to the trustees in the course of the discussions, the trustees have decided it would be in the best interests of all concerned not to proceed with the planned action," the trustees said in a statement.

The trustees had planned on Monday to ask a Scottish court to delay final approval of the HBOS takeover, pending proposals of financial support for the fund from Lloyds.

The trustees said they were pushing ahead with a valuation of the pension fund which could reveal a deficit of 3 to 5 billion pounds, and pledged to keep up the pressure on Lloyds for a funding commitment.

"We believe that the actuarial valuation process currently underway will in due course deliver the necessary security for the scheme and its beneficiaries, and look forward to further discussions with Lloyds TSB," they said.

HBOS and Lloyds aim next week to raise 12 billion pounds and 5 billion pounds respectively in a share issue underwritten by the UK government as part of its bailout of the banking sector.

(Reporting by Myles Neligan;)