NOTICE OF COURT MEETING

HBOS plc

(registered in Scotland with registered number SC218813)

NOTICE IS HEREBY GIVEN that, in a petition presented by HBOS plc (the Company ) to the Court of Session in Edinburgh, Scotland (the Court ) and by an order pronounced on 14 November 2008 (the Order ), the Court has directed that a meeting (the Court Meeting ) of the holders (other than Restricted Entities (as defined in the Scheme)) of the Scheme Shares (as defined in the Scheme) be convened for the purpose of considering and, if thought fit, approving (with or without modification) a scheme of arrangement (the Scheme ) pursuant to Part 26 of the Companies Act 2006 proposed to be made between the Company and the holders of Scheme Shares ( Scheme Shareholders ) and that such meeting will be held at The NEC Birmingham, B40 1NT on 12 December 2008 at 10.00 a.m. (London time), at which place and time all Scheme Shareholders (other than Restricted Entities) are invited to attend.

At the Court Meeting, the following resolution will be proposed:

‘‘That the scheme of arrangement dated 14 November 2008 (the Scheme), between the Company and the Scheme Shareholders (as defined in the Scheme), a print of which has been produced to this meeting and for the purposes of identification signed by the chairman hereof in its original form or with or subject to any modification, addition or condition approved or imposed by the Court, be approved and the directors of the Company be authorised to take all such actions as they consider necessary or appropriate for carrying the Scheme into effect.’’

Voting on the resolution will be by poll which shall be conducted as the chairman of the Court Meeting may determine. For the Court Meeting (or any adjournment thereof) to be properly convened, a quorum of two persons (other than Restricted Entities) entitled to vote upon the business to be transacted, each being a Scheme Shareholder, the proxy of a Scheme Shareholder or (where the Scheme Shareholder is a corporation) a duly authorised representative must be present.

A circular (the Circular) containing a copy of the Scheme and a copy of the explanatory statement required to be furnished pursuant to section 897 of the Companies Act 2006 in relation to the Scheme is being issued to Scheme Shareholders and to HBOSSA Participants, Halifax Share Dealing Account Participants, HBOS Share ISA Participants and HBOS ADS Holders (as such terms are defined in the Circular). Copies of the Circular may be obtained by logging on to the Company's website, www.hbosplc.com, or from the Company's registrar, Computershare Investor Services PLC, in person at The Pavilions, Bridgwater Road, Bristol, BS13 8AE (or by calling +44 (0) 870 702 0102*). Copies of the Circular may be inspected during normal business hours on any weekday (Saturday, Sunday and UK public holidays excepted) at the offices of HBOS plc, The Mound, Edinburgh, EH1 1YZ, United Kingdom and at the offices of Allen & Overy LLP, One Bishops Square, London, E1 6AD, United Kingdom. *Calls from BT landlines to 0870 numbers will cost no more than 6p a minute plus a 7p connection fee. The price of calls through other phone companies and from mobile phones will be different. The call price quoted is correct as of October 2008.

By the Order, the Court has appointed Lord Stevenson, or, failing him, Sir Ron Garrick or failing him, Ms Karen Jones, to act as chairman of the Court Meeting and has directed the chairman to report the result of the meeting to the Court.

The Scheme will be subject to the subsequent sanction of the Court.

Dated 14 November 2008

Allen & Overy LLP          Dickson Minto W.S.

One Bishops Square          16 Charlotte Square

London E1 6AD            Edinburgh EH2 4DF

Solicitors for the Company

Information for Scheme Shareholders

Scheme Shareholders entitled to attend, speak and vote at the Court Meeting may vote in person at the Court Meeting or they may appoint another person as their proxy to attend and vote in their stead or, if any Scheme Shareholder is a corporation, it may vote by way of (a) corporate representative(s). A proxy need not be a member of the Company. A blue Form of Proxy for use at the Court Meeting is enclosed with the Circular which is being sent to Scheme Shareholders in connection with the Scheme. Completion and return of a blue Form of Proxy will not prevent a Scheme Shareholder from attending and voting at the Court Meeting, or any adjournment thereof, in person if he or she wishes to do so.

Scheme Shareholders are entitled to appoint a proxy in respect of some or all of their Scheme Shares. Scheme Shareholders are also entitled to appoint more than one proxy, provided that each proxy is appointed to exercise the rights attached to a different Scheme Share held by such holder. A space has been included in the blue Form of Proxy to allow Scheme Shareholders to specify the number of Scheme Shares in respect of which that proxy is appointed. Scheme Shareholders who return the blue Form of Proxy duly executed but leave this space blank will be deemed to have appointed the proxy in respect of all of their Scheme Shares. Scheme Shareholders who wish to appoint more than one proxy in respect of their shareholding should contact the Company's registrar for further blue Forms of Proxy or photocopy the Form of Proxy as required.

In the case of joint holders of Scheme Shares, the vote of the senior who tenders a vote, whether in person or by proxy, or (where that senior joint holder is a corporation) by corporate representative, will be accepted to the exclusion of the vote(s) of the other joint holder(s) and, for this purpose, seniority will be determined by the order in which the names stand in the Register of Members of the Company in respect of the joint holding.

To be valid blue Forms of Proxy, together with any power of attorney or other authority (if any) under which it is signed, should be lodged with Computershare Investor Services PLC, PO Box 1912, The Pavilions, Bridgwater Road, Bristol BS3 9BR, not less than 48 hours before the time appointed for the Court Meeting or any adjournment thereof but if Forms of Proxy are not so lodged they may be handed to the Company’s registrar on behalf of the chairman of the Court Meeting before the start of the Court Meeting (or adjourned meeting).

As an alternative to completing and returning the printed Form of Proxy, Scheme Shareholders may, not less than 48 hours before the time appointed for the Court Meeting or any adjournment thereof, submit their Form of Proxy electronically by accessing www.hbosplc.com/gm/onlinevoting. For security purposes, Scheme Shareholders will need to provide their Online Proxy Voting Pin (printed on the blue Form of Proxy) and postcode to validate the submission of their blue Form of Proxy online.

The completion and return of a blue Form of Proxy will not preclude a member from attending and voting in person at the meeting.

Scheme Shareholders entitled to attend and vote at the Court Meeting who hold their Scheme Shares through CREST may appoint a proxy or proxies through the CREST electronic proxy appointment service by using the procedures described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.

In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a CREST Proxy Instruction ) must be properly authenticated in accordance with Euroclear UK & Ireland’s specifications and must contain the information required for such instructions, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or any amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by Computershare (ID 3RA50) not later than 48 hours before the time fixed for the Court Meeting (or any adjournment thereof). For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which Computershare is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.

The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the CREST Regulations.

Entitlement to attend and vote at the Court Meeting or any adjournment thereof, and the number of votes which may be cast thereat, will be determined by reference to the Register of Members of the Company at 6.00 p.m. on 10 December 2008 or, if the meeting is adjourned, 6.00 p.m. on the day two days before the date fixed for such adjourned meeting (the Voting Record Time ). Changes to the Register of Members of the Company after 6.00 p.m. on 10 December 2008 or, if the meeting is adjourned, 6.00 p.m. on the day two days before the date fixed for such adjourned meeting, shall be disregarded in determining the rights of any person to attend and vote at the Court Meeting.

In order to facilitate voting by corporate representatives at the Court Meeting, arrangements will be put in place at the Court Meeting so that: (i) if a corporate shareholder has appointed the chairman of the meeting as its corporate representative to vote on a poll in accordance with the directions of all of the other corporate representatives for that shareholder at the meeting, then on a poll those corporate representatives will give voting directions to the chairman and the chairman will vote (or withhold a vote) as corporate representative in accordance with those directions; and (ii) if more than one corporate representative for the same corporate shareholder attends the meeting but the corporate shareholder has not appointed the chairman of the meeting as its corporate representative, a designated corporate representative will be nominated, from those corporate representatives who attend, who will vote on a poll, and the other corporate representatives will give voting directions to that designated corporate representative. Corporate shareholders are referred to the guidance issued by the Institute of Chartered Secretaries and Administrators on proxies and corporate representatives (www.icsa.org.uk) for further details of this procedure. The guidance includes a sample form of appointment letter if the chairman is being appointed as described in (i) above.

Information for HBOSSA Participants, Halifax Share Dealing Account Participants and HBOS Share ISA Participants

HBOSSA Participants, Halifax Share Dealing Account Participants and HBOS Share ISA Participants are requested to complete and sign the blue Form of Direction enclosed with the Circular which is being sent to them in connection with the Scheme and to return the Form of Direction in accordance with the instructions printed thereon as soon as possible, but in any event, so as to be received at Computershare Investor Services PLC, PO Box 1912, The Pavilions, Bridgwater Road, Bristol BS3 9BR at least 72 hours before the time fixed for the meeting or any adjournment thereof.

By completing and returning a Form of Direction, HBOSSA Participants, Halifax Share Dealing Account Participants or HBOS Share ISA Participants may either: (a) instruct Halifax Nominees Limited, HSDL Nominees Limited or Halifax Investment Services Limited (as appropriate) to appoint a proxy (who may be the chairman of the meeting) to attend and vote on their behalf, or (b) request that Halifax Nominees Limited, HSDL Nominees Limited or Halifax Investment Services Limited (as appropriate) appoint them as proxy in order for them to attend and vote at the meeting themselves.

Alternatively, HBOSSA Participants, Halifax Share Dealing Account Participants and HBOS Share ISA Participants wishing to vote on the Scheme and/or attend the meeting in person may withdraw their HBOS Shares (as defined in the Circular) from the HBOS Shareholder Account, Halifax Share Dealing Account or HBOS Share ISA, as appropriate, (in accordance with its terms and conditions) so as to become registered holders of HBOS Shares prior to the Voting Record Time.

In order to do this HBOSSA Participants, Halifax Share Dealing Account Participants or HBOS Share ISA Participants should contact the Company's registrar to request the appropriate form for completion. Participants should ensure their duly completed form reaches the Company's registrar by 1 December 2008 to allow for adequate time to complete this process and so be eligible to vote as a registered shareholder.

As an alternative to completing and returning the printed Form of Direction, participants may, at least 72 hours before the time fixed for the Court Meeting or any adjournment thereof, submit their Form of Direction electronically by accessing www.hbosplc.com/gm/onlinevoting. For security purposes, participants will need to provide their Online Proxy Voting Pin (printed on the blue Form of Direction) and postcode to validate the submission of their blue Form of Direction online.

Information for HBOS ADS Holders

If you are a registered holder of HBOS ADSs (as defined in the Circular), please complete and sign the ADS Voting Instruction Card which is being sent to holders in connection with the Scheme in accordance with the instructions printed thereon and return it in the postage-paid envelope provided (for use in the US only) to the HBOS Depositary (as defined in the Circular) at the appropriate address set forth on the ADS Voting Instruction Card as soon as possible and, in any event, so as to be received no later than 5.00 p.m. (New York time) on 9 December 2008. The HBOS Depositary will endeavour to vote in accordance with holders' instructions.

If you hold your HBOS ADSs indirectly, you must rely on the procedures of the bank, broker or other financial institution through which you hold your HBOS ADSs if you wish to give voting instructions. Alternatively, if you wish to vote on the Scheme and/or attend the meeting, you may present your HBOS ADSs to the HBOS Depositary for cancellation and receive (upon compliance with the HBOS Deposit Agreement pursuant to which the underlying HBOS Shares have been deposited, including payment of any depositary fees and any applicable taxes and governmental charges) delivery of the underlying HBOS Shares so as to become a registered holder of such HBOS Shares prior to the Voting Record Time.

Only holders of HBOS ADSs on the register of ADS Holders of the HBOS Depositary as at 5.00 p.m. (New York time) on 10 November 2008 are entitled to give voting instructions in respect of the Court Meeting in respect of the number of Scheme Shares underlying their HBOS ADSs at that time.

General

Forms of Proxy, Forms of Direction and ADS Voting Instruction Cards returned by fax or email will not be accepted.

Nominated persons are reminded that they should contact the registered holder of their shares (and not the Company) on matters relating to their investments in the Company.

As at 12 November 2008 (the latest practicable date prior to the publication of this notice) the Company’s issued ordinary share capital consists of 5,408,389,326 ordinary shares, none of which are held in treasury. Therefore the Company’s total issued voting capital is 5,408,389,326 as at 12 November 2008.