Halifax bosses own up to bank failings

Flashback to 2001 when James Crosby and Andy Hornby announced the ''Halifax Group had mortgage assets of over �100 billion - a UK first.
Flashback to 2001 when James Crosby and Andy Hornby announced the ''Halifax Group had mortgage assets of over �100 billion - a UK first.

THE two men held largely responsible for the near collapse of HBOS - Britain’s biggest mortgage lender - have apologised to MPs.

Former Halifax Bank of Scotland chief executive Sir James Crosby admitted lending in its corporate banking arm was “incompetent”.

Sir James led the bank between 2001 and 2005, and was accused by MPs of “bailing out” by selling about two-thirds of his HBOS shares between leaving and its rescue takeover by Lloyds.

He and his successor Andy Hornby appeared at the Parliamentary Commission on Banking Standards to answer for the bank’s pre-crisis lending and subsequent merger.

Sir James drove the merger of Halifax and Bank of Scotland in 2001 and was asked if he should be stripped of his knighthood.

Former Royal Bank of Scotland CEO Fred Goodwin lost his knighthood in January. Sir James said: “That’s for others to decide. I’m completely realistic about my reputation.”

Mr Hornby said the bank’s board may have had too much information from each division to fully understand the true risks before its near collapse in 2008.

Mr Hornby, who was CEO from August 2006 until its Lloyds merger, admitted the bank’s corporate division had too much concentration in commercial real estate and failed to realise the threat of its over-reliance on wholesale funding.

“With hindsight, at times it may have been the case that the sheer volume of information supplied by every division right across operational risk, credit risk and regulatory risk may at times have made it harder for the board to fully understand the potential issues facing the business, “ he said.