BLANK QUITS LLOYDS OVER HBOS DISASTER
LLOYDS Banking Group must begin the hunt for a successor to chairman Sir Victor Blank, after the bank chief announced yesterday that he would retire before the bank’s 2010 AGM.
In a board meeting at the bank’s Gresham Street headquarters, Blank officially notified fellow board members of his departure, which follows massive investor anger over the bank’s acquisition of HBOS.
Trade minister and former Standard Chartered chairman Mervyn Davies has emerged as an early front-runner for the position.
Outspoken former trade minister Lord Digby Jones has also been touted as a potential chairman, as has the former Prudential chairman Harvey McGrath. Other candidates being tipped yesterday include former president of Goldman Sachs Europe Simon Robertson, and Oliver Pawle, formerly the vice chairman of investment banking at UBS. Lord Leitch has stepped up to be deputy chairman.
Sources close to the situation said Blank had decided to step down because of criticism of his role in last year’s takeover of HBOS, which blew a £10bn hole in Lloyds’ full year results and led the bank to predict a 50 per cent rise in impairments this year.
Friends said Blank felt the criticisms had caused “too great a focus on personality issues” and he had become concerned that whispers about his future were “obscuring the merits of the new group”.
In a statement, Blank said: “I believe it is the right time for the Group to appoint a new chairman. I will continue working until my successor is appointed to ensure the successful integration of the two banks.”
Blank has been seen as the mastermind behind the takeover of HBOS after he secured a guarantee from Gordon Brown that competition law would be waived to allow a takeover.
But that deal has soured ever since, with the bank forced earlier this month to warn of a 50 per cent increase in impairments due largely to mounting loan defaults on corporate loans acquired from HBOS.
Pressure on Blank increased in recent weeks, with Aviva Investors – which holds 0.5 per cent of Lloyds – announcing its intention to vote against his re-election.
UK Financial Investments (UKFI) – which manages the government’s stakes in banks – was also considering voting against Blank.
Some say that the position of chief executive Eric Daniels will be uncertain once a new chairman is appointed. Daniels wholly supported the HBOS acquisition.