Lloyds chairman pays price for HBOS deal

Sir Victor Blank, chairman of Lloyds Banking Group, is to step down.

Powerbrokers: (l-r) HBOS' Andy Hornby and Lloyds' Sir Victor Blank and Eric Daniels tie up Lloyds/HBOS deal
Powerbrokers: (l-r) HBOS' Andy Hornby and Lloyds' Sir Victor Blank and Eric Daniels tie up Lloyds/HBOS deal

One of the key powers behind its move to snap up struggling HBOS, Blank has endured fierce shareholder criticism as the deal's popularity has plunged. Lloyds insisted it was his decision to go, but the government investment vehicle UKFI told him he could not count on its backing for re-election at the bank's annual meeting next month. Angry private shareholders have reportedly already sent in a sackful of votes against him.

What was the reaction?

The story made headlines, but few were surprised. While some reports suggested Blank would be proved right in the end, all agreed the HBOS deal was his undoing. He has promised to go before June 2010, but The Times expected it to be far earlier than that. ‘Lloyds cannot afford to be seen to be run by a lame-duck chairman,' the paper said. Reuters quoted one institutional investor as saying the way the HBOS deal has panned out made his position ‘untenable'.

Who are the PR players?

The writing was on the wall for Blank when Finsbury lost its long-standing retained account with the bank. Finsbury and its founder Roland Rudd were seen to be far closer to Blank than CEO Eric Daniels. M: Communications picked up the account in March.

What happens next?

All eyes will now be on Daniels. With Blank going, speculation is mounting that Daniels - the other architect of the HBOS deal - will be forced to follow. Many shareholders will be keen to draw a line under recent events and move on with a leadership untainted by the HBOS saga and descent into part-nationalisation.

 

 

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