Lloyds CEO says HBOS deal not "shotgun marriage"

LONDON (Reuters) - Lloyds TSB's (LLOY.L) takeover of UK rival HBOS HBOS.L was not a shotgun marriage or a government brokered rescue of its rival, and the banks have been in talks for several weeks, Lloyds' chief executive said.

"There shouldn't be any impression this is a shotgun marriage or a forced marriage, this is something that's been looked at for a good long while. Our most recent set of conversations have taken place over the last several weeks," Eric Daniels, chief executive, told reporters on a conference call on Wednesday.

Lloyds has agreed to buy HBOS for 12.2 billion pounds, with the government said to have encouraged the move amid fears turmoil in financial markets could claim another UK victim.

"It's a commercial deal ... we struck the deal on commercial terms," Daniels said.

Lloyds' core tier 1 capital ratio will fall to 5.9 percent due to the deal. Daniels said he is targeting a ratio of between 6 and 7 percent and will pay this year's final dividend in shares, rebase the dividend next year, achieve big cost savings and consider asset disposals.

(Reporting by Steve Slater; Editing by Quentin Bryar)