Bank duo oppose Lloyds-HBOS deal

[Legal Beagles]

The ex-chiefs of Bank of Scotland and Royal Bank of Scotland write to HBOS saying it should remain independent.

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[Amethyst]

Re: Bank duo oppose Lloyds-HBOS deal

Bank duo oppose Lloyds-HBOS deal


Lloyds has not yet put a figure on the job losses

The former chief executives of Bank of Scotland and Royal Bank of Scotland have written to HBOS calling for its chairman and chief executive to resign.
The writers, Sir Peter Burt and Sir George Matthewson, are trying to "blow up" the takeover of HBOS by Lloyds TSB, says BBC business editor Robert Peston.
Sir Peter and Sir George say HBOS and its shareholders would be better off if the bank were to remain independent.
HBOS is being taken over by Lloyds TSB in a £12.2bn merger.
Lloyds TSB has said that its acquisition of HBOS would save it at least £1.5bn ($2.4bn) a year, raising fears of heavy job losses from the merger.

Their initiative may be particularly welcomed in Scotland, where there has been widespread concern that the takeover would lead to significant job losses


BBC Business Editor Robert Peston



Read Robert Peston's blog

The letter-writers argue HBOS no longer needs to be rescued by Lloyds TSB, because the government and Bank of England have offered vital funds to replace those that could be withdrawn by money managers and other creditors.
"It is our intention to create a detailed alternative plan that we believe will represent better value for both the HBOS shareholders and stakeholders alike by keeping HBOS as an independent bank," their letter says.
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The intervention by Sir Peter and Sir George will be difficult for the board of HBOS to ignore, not least because the former is credited with creating HBOS.
He was chief executive of Bank of Scotland when it merged with Halifax to form HBOS.
"Burt and Matthewson are persuaded that HBOS would be viable as an independent, thanks to the massive taxpayer support offered to all the banks in October by the Treasury," says BBC business editor Robert Peston.
Our correspondent says Sir Peter and Sir George have sent the letter to the chairman of HBOS, Sir Dennis Stevenson.
In it they say Sir Dennis and HBOS chief executive Andy Hornby should resign immediately - and that Sir George Matthewson should become the new chairman of the bank and Sir Peter Burt should be its chief executive.
"Burt and Matthewson would stay in post long enough to ensure that HBOS was once again perceived to be on a sound footing," says our correspondent.
"They would commit to recruit new credible management for the top positions at the bank, to make themselves redundant just as soon as the bank's owners felt that was prudent.
"They will canvas shareholders in an attempt to requisition an emergency meeting to have Stevenson and Hornby removed, if they won’t go of their own accord."
Highly critical
The initiative may be popular in Scotland, where there has been widespread concern the takeover would lead to significant job losses.
There are also worries a takeover could damage the position of Edinburgh - the location of HBOS’s imposing head office - as a financial centre.
The Scottish National Party has been highly critical of the takeover.

[natweststaffmember]

Re: Bank duo oppose Lloyds-HBOS deal

I think this is a very interesting argument being put up by the former chiefs of RBS and HBOS because had it survived a further month or so, the government would have stepped in and offered financial support. The problem is, that the government have stated they will only give support if the merger happens which will inevitably lead to job losses which then burdens the state rather than helping HBoS and then keeping jobs and meaning more tax is made on earnings. I think the government have made a mistake and I think the loss of HBoS as an independent bank is a mistake. Job losses does not help the economy and does not help those workers of HBoS who could be out of a job, and the soon to be former HBOS chief, is due to help LTSB in that task. Its a rotten deal that the government what to happen.