Lloyds chairman announces resignation

| May 17, 2009
”Lloyds

Sir Victor Blank has announced he is to retire from the position as chairman at Lloyds Banking Group.

Sir Victor’s shock resignation comes as he and chief executive, Eric Daniels, have faced criticism from shareholders following the hasty takeover of HBOS.

According to Roger Lawson of the UK Shareholders’ Association: “Almost all of the shareholders he has spoken to said he should go. He was behind the merger idea and people told him it was a mistake, said Mr Lawson.

However, Sir Victor denied his resignation had anything to do with pressure from shareholders.

Meanwhile, the Sunday Times has reported that City sources hinted that Eric Daniels’ position looks in doubt.

Meanwhile, in a statement, Sir Victor 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. This remains – in the medium term – a unique value-enhancing opportunity.”

Commenting on Sir Victor’s departure, Lord Leitch, who has been appointed deputy chairman, said: “We are very sad about Sir Victor’s personal decision to retire, although we respect and understand his reasons for it,” he said in a statement.

For the full 2008 year, Lloyds TSB (as it was previously known) made a profit of £807 million – an 80% fall compared with the previous year, while HBOS made a loss for the full year of £11 billion. The two banks together are expected to be in loss this year.

In related news, last month Lloyds confirmed it was shedding 985 jobs over the next two years at its motor finance unit, after a detailed review established that the division was “no longer financially viable”.

Lloyds has been looking at ways to slash costs after the bank was created following the merger.

Lloyds Banking Group, which is 43% owned by the taxpayer, recently agreed to sign up to the Government’s Asset Protection Scheme.

The scheme, which insures against losses arising from toxic assets, will see Lloyds commit to lending at least £28 billion over the next few years.

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