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Eric Daniels calls for Lloyds to keep HBOS

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by Kay Mitchell

Outgoing chief executive of Lloyds Banking Group, Eric Daniels, is calling on the Government to allow the bank to keep HBOS.

The controversial takeover, which occurred at the height of the financial crisis, could be scrapped if a Government investigation establishes it has damaged competition.

Final recommendations with regard to the takeover will be known next September, however, an interim report is due early next year, which is set to provide suggestions as to which way the investigation is going.

However, there has been speculation that the takeover could be “reversed”.

The takeover, which was subject to much criticism, left Lloyds Banking Group 43% state-owned.

Speaking to the Financial Times, Mr Daniels said: “There was a sentiment [then] that financial stability was more important and that the issue of competition took second place. As a result of that, the secretary of state signed off the deal. That is a matter of public record.”

The takeover has also enraged shareholders, who have held several protests across the country.

The shareholder group, Lloyds Action Now (LAN), claim their savings were wiped out following the takeover.

LAN also claim investors were lured into voting for the takeover, while not being provided with all the relevant information – particularly in respect to HBOS’ finances.

The group is suing Lloyds directors and the Government. However, the bank claims it provided shareholders “thorough and appropriate information”.

Meanwhile Mr Daniels recently announced he will retire next year. He is the longest serving CEO at a major British bank and will continue in his post until next year when a replacement is found.

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News posted: November 25, 2010

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