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HBOS has brushed off sub-prime concerns and announced it’s set to open a global office in Edinburgh.

It’s been a turbulent week for the Scottish bank, which blamed the global credit squeeze for a 4% fall in its profit margin on the previous year. However, it only wrote down a comparatively measly £227m in fair value adjustments due to the US sub-prime crisis.

Analysts had told us they expected 2008 to be even worse for HBOS, and said it could see some redundancies. However, it is now set to invest £100m in an Edinburgh headquarters, safeguarding the jobs of around 6,000 staff.

The desired location, the former Scottish & Newcastle brewery, would see new state-of-the-art offices bringing together its disparate departments. It would also rival the offices of that other Scottish behemoth – Royal Bank of Scotland – which has a single hub for its staff in the Gogarburn area of Edinburgh.

An HBOS spokesperson said: “We have identified a possible opportunity to potentially consolidate all of our Edinburgh-based businesses in one hub at Fountainbridge. HBOS employs approximately 6,000 people across 16 buildings in Edinburgh. Our operations in the city cover the full range of business activities – including group, corporate banking, retail banking, international, and insurance and investment.”

The spokesperson added: “There are clear benefits in bringing together all Edinburgh-based colleagues on to the one city-centre site.”

Profits for HBOS last year amounted to £5.47bn, down from £5.7bn in 2006.

As for the outlook for 2008, Leigh Goodwin, an analyst at specialist investment bank Fox-Pitt, Kelton, says: “A lot of its earnings have come from the corporate bank and that has been heavily involved in commercial property loans, and demand for those is going to diminish. And also I don’t see the money from its own portfolios of investments being anything like as good as last year.”