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Ousted Lloyds Banking Group chairman Sir Victor Blank today apologised to furious shareholders but insisted the takeover of failed rival HBOS was the right thing to do.
Blank, who agreed to leave the bank in the next 12 months following pressure from investors, said he was sorry how far Lloyds shares have fallen and for scrapping the much-cherished dividend.
Shares tumbled from above 200p before the HBOS deal was struck in September to just 30p in March, having peaked at nearly 460p in February 2007. They were up 1.2p to 68.3p today.
“The board and I are sorry about the decline in our share price and the financial difficulty that the temporary suspension of our dividend has caused shareholders,” Blank told angry investors at the annual meeting in Glasgow. He added that he is standing down as chairman because he is concerned that “the ongoing focus on personalities is just not good for the business”.
But his apology was met with cries of “nonsense” from investors who said the takeover of the risky Halifax and Bank of Scotland owner HBOS by a traditionally conservative bank was a disaster.
Shareholder Jim Macintyre said: “The whole thing was pushed through too quickly and now we're paying the price.”
The board faced fierce criticism over the deal, which was stitched together by Blank, chief executive Eric Daniels, and Gordon Brown.
It saw the Government pump £17 billion into the combined bank and take a 43% stake. Shortly after the deal was struck, Lloyds reported massive losses of nearly £11 billion at HBOS. HBOS shareholder Alexander Inglis said: “We were quite fortunate that Lloyds were daft enough to buy us.”
The board came under pressure from shareholder group Lloyds Action Now, which plans to take legal action against directors to recoup their losses.
The Lloyds TSB Group Union also demanded that 5000 jobs outsourced to India are brought back to the UK, where as many as 25,000 staff could lose their jobs as a result of the merger.
Unions also dismissed a guarantee by the bank that it has “no current plans” to close its final salary pension scheme for its 30,000 existing members as “not the guarantee we were seeking”.
Despite the anger from the floor, shareholders looked set to vote for the re-election of Lloyds board members including Blank and for the bank's plan to raise an extra £4 billion from investors.
