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| Architects of HBOS's downfall | Architects of HBOS's downfall |
| (about 2 hours later) | |
| Sir James Crosby | Sir James Crosby |
| How did he get to HBOS? | How did he get to HBOS? |
| A qualified actuary, James Crosby was said to have a detailed grasp of financial risk. At 38, he joined Halifax in its life insurance business and within five years he was running the newly demutualised – and acquisition-hungry – mortgage bank. | A qualified actuary, James Crosby was said to have a detailed grasp of financial risk. At 38, he joined Halifax in its life insurance business and within five years he was running the newly demutualised – and acquisition-hungry – mortgage bank. |
| No sooner had he taken the helm than Crosby began plotting a deal that would again transform the business, a bold merger with Bank of Scotland in 2001. He set the group on a fierce expansionary course. Rapid lending to big corporate clients, particularly in property and retailing, was seen as a triumph, and when he departed as chief executive in 2006, Crosby's reputation was unrivalled. He received a knighthood for services to the financial industry, and joined the boards of ITV and catering group Compass. | No sooner had he taken the helm than Crosby began plotting a deal that would again transform the business, a bold merger with Bank of Scotland in 2001. He set the group on a fierce expansionary course. Rapid lending to big corporate clients, particularly in property and retailing, was seen as a triumph, and when he departed as chief executive in 2006, Crosby's reputation was unrivalled. He received a knighthood for services to the financial industry, and joined the boards of ITV and catering group Compass. |
| Ministers and regulators also sought his counsel. Alistair Darling asked him to write a report into the UK mortgage finance market. He also sat on the board of the City regulator, the FSA, from 2004, and a year after his departure from HBOS Darling appointed him FSA deputy chairman. | Ministers and regulators also sought his counsel. Alistair Darling asked him to write a report into the UK mortgage finance market. He also sat on the board of the City regulator, the FSA, from 2004, and a year after his departure from HBOS Darling appointed him FSA deputy chairman. |
| What does the report say about him? | What does the report say about him? |
| The commission's report describes him as "the architect" of the strategy that caused the downfall of HBOS. | The commission's report describes him as "the architect" of the strategy that caused the downfall of HBOS. |
| What is he doing now? | What is he doing now? |
| Crosby hung on as deputy chairman of the FSA throughout the 2008 banking crisis and the demise of HBOS. It was not until damaging accusations about him from the bank's former head of regulatory risk Paul Moore were aired in parliament in February 2009 that he stepped down. Crosby insisted there was "no merit" in claims that he fired Moore after the risk expert warned of dangerous lending practices at the bank. | |
| Crosby left ITV later that year, amid widespread criticism of the board. However, he remains on the board at Compass. | Crosby left ITV later that year, amid widespread criticism of the board. However, he remains on the board at Compass. |
| In January 2009, Crosby was appointed a director of FTSE 250 banking software group Misys, becoming chairman eight months later. Last summer, after a fierce bidding war, he agreed to sell Misys to a US private equity house for £1.27bn. He also remains on the advisory board of Bridgepoint, the private equity group behind Pret a Manger and Fat Face. | |
| Two years ago he became chairman of sub-prime car loans group Moneybarn, where he is also a shareholder. | Two years ago he became chairman of sub-prime car loans group Moneybarn, where he is also a shareholder. |
| What does he say? | What does he say? |
| Crosby offered no comment. It took him until December to apologise for his role at HBOS. He told the banking commission: "I am apologising. I played a major part in building a business that subsequently failed." | Crosby offered no comment. It took him until December to apologise for his role at HBOS. He told the banking commission: "I am apologising. I played a major part in building a business that subsequently failed." |
| Andy Hornby | Andy Hornby |
| How did he get to HBOS? | How did he get to HBOS? |
| A stellar student at Oxford, Hornby and went on to graduate was top of his 800-strong class at Harvard. He cut his teeth in business at Asda in the 1990s as the supermarket group emerged as a serious challenger to the likes of Sainsbury's and Tesco. Asda was seen as the executive talent factory of the day, run by Archie Norman and later Allan Leighton. Despite having no banking experience, Hornby was poached by Crosby and, as his protege, became part of the new team at the top of HBOS. He was tasked with bringing his retail expertise to the high street banking business. In 2006, at the age of 38, in 2006 it was announced he was to succeed Crosby as chief executive. He used the Halifax brand to launch a series of challenges to the dominance of the "big four" – Lloyds TSB, Royal Bank of Scotland, Barclays and HSBC. The message was hammered home in advertising campaigns fronted by Howard, the singing bank manager. | A stellar student at Oxford, Hornby and went on to graduate was top of his 800-strong class at Harvard. He cut his teeth in business at Asda in the 1990s as the supermarket group emerged as a serious challenger to the likes of Sainsbury's and Tesco. Asda was seen as the executive talent factory of the day, run by Archie Norman and later Allan Leighton. Despite having no banking experience, Hornby was poached by Crosby and, as his protege, became part of the new team at the top of HBOS. He was tasked with bringing his retail expertise to the high street banking business. In 2006, at the age of 38, in 2006 it was announced he was to succeed Crosby as chief executive. He used the Halifax brand to launch a series of challenges to the dominance of the "big four" – Lloyds TSB, Royal Bank of Scotland, Barclays and HSBC. The message was hammered home in advertising campaigns fronted by Howard, the singing bank manager. |
| What does the report say about him? | What does the report say about him? |
| He "failed to address" HBOS weaknesses. | He "failed to address" HBOS weaknesses. |
| What is he doing now? | What is he doing now? |
| Hornby was pushed out of HBOS as it was rescued in a taxpayer-backed merger with Lloyds TSB in October 2008. If his banking reputation was in tatters, his skills as a retailer were still in demand. He was soon appointed chief executive of Britain's largest private equity-backed firm, Alliance Boots. | Hornby was pushed out of HBOS as it was rescued in a taxpayer-backed merger with Lloyds TSB in October 2008. If his banking reputation was in tatters, his skills as a retailer were still in demand. He was soon appointed chief executive of Britain's largest private equity-backed firm, Alliance Boots. |
| Two years ago he took a similar role at Coral bookmakers, another private equity-backed group that had been through a painful refinancing. He is also chairman of the online chemists Pharmacy2U. | Two years ago he took a similar role at Coral bookmakers, another private equity-backed group that had been through a painful refinancing. He is also chairman of the online chemists Pharmacy2U. |
| What does he say? | What does he say? |
| Through Coral, he refused to comment. In December he told the banking commission: "With hindsight, at times it may have been the case that the sheer volume of information supplied by every division … made it harder for the board to fully understand the potential issues facing the business." | Through Coral, he refused to comment. In December he told the banking commission: "With hindsight, at times it may have been the case that the sheer volume of information supplied by every division … made it harder for the board to fully understand the potential issues facing the business." |
| Lord Stevenson | Lord Stevenson |
| How did he get to HBOS? | How did he get to HBOS? |
| Stevenson was already well known in the City when he took on the chairmanship of Halifax in 1999. It was a post he juggled with non-executive directorships at Manpower, English Partnerships, BSkyB, Lazards and the wealth managers St James's Place. He was also chairman of Pearson, owner of the Financial Times. Together with Crosby, he quickly set about hatching the audacious merger with Bank of Scotland that would result in both men heading the enlarged business. Already knighted, the merger's apparent success led to his being recommended for a life peerage in 1999. | Stevenson was already well known in the City when he took on the chairmanship of Halifax in 1999. It was a post he juggled with non-executive directorships at Manpower, English Partnerships, BSkyB, Lazards and the wealth managers St James's Place. He was also chairman of Pearson, owner of the Financial Times. Together with Crosby, he quickly set about hatching the audacious merger with Bank of Scotland that would result in both men heading the enlarged business. Already knighted, the merger's apparent success led to his being recommended for a life peerage in 1999. |
| What does the report say about him? | What does the report say about him? |
| "Responsibility [for the near-collapse of the bank] lies particularly with Lord Stevenson". | "Responsibility [for the near-collapse of the bank] lies particularly with Lord Stevenson". |
| What is he doing now? | What is he doing now? |
| Records at Companies House show Stevenson remains a director of a number of charities including the foundation behind the Tate art galleries and the Institute for Government, which provides advice "to improve government effectiveness". | Records at Companies House show Stevenson remains a director of a number of charities including the foundation behind the Tate art galleries and the Institute for Government, which provides advice "to improve government effectiveness". |
| What does he say? | What does he say? |
| Stevenson did not comment. In December, he told parliament's banking commission that he "felt awful" that the board had failed to foresee problems in the bank funding markets on which the bank relied. | Stevenson did not comment. In December, he told parliament's banking commission that he "felt awful" that the board had failed to foresee problems in the bank funding markets on which the bank relied. |
| Peter Cummings | Peter Cummings |
| How did he get to HBOS? | How did he get to HBOS? |
| Peter Cummings, once head of commercial lending at Bank of Scotland, is the only HBOS executive to have faced official sanction from the now-defunct Financial Services Authority (FSA) – an action he complains was unwarranted scapegoating. His division had been seen as a star performer within the HBOS group, but was eventually forced to book bad debt provisions on its poor quality loans of £26bn. He has described the figures as "horrendous". | Peter Cummings, once head of commercial lending at Bank of Scotland, is the only HBOS executive to have faced official sanction from the now-defunct Financial Services Authority (FSA) – an action he complains was unwarranted scapegoating. His division had been seen as a star performer within the HBOS group, but was eventually forced to book bad debt provisions on its poor quality loans of £26bn. He has described the figures as "horrendous". |
| A quiet Glaswegian who had worked his way up from his local Dumbarton branch, it was not until 2006 that he was appointed to the HBOS board. He was well known for helping finance high-profile entrepreneurs including Sir Philip Green and Sir Tom Hunter. | A quiet Glaswegian who had worked his way up from his local Dumbarton branch, it was not until 2006 that he was appointed to the HBOS board. He was well known for helping finance high-profile entrepreneurs including Sir Philip Green and Sir Tom Hunter. |
| Cummings stepped down in early 2009 after the full extent of poor-quality loans from his division had emerged. | Cummings stepped down in early 2009 after the full extent of poor-quality loans from his division had emerged. |
| What does the report say about him? | What does the report say about him? |
| "The downfall cannot be laid solely at the feet of Peter Cummings." | "The downfall cannot be laid solely at the feet of Peter Cummings." |
| What is he doing now? | What is he doing now? |
| Last September he was banned from the City for life by the FSA and fined £500,000. But a furious Cummings said: "This is tokenism at its most sinister, and has made it feel throughout like institutional oppression." | Last September he was banned from the City for life by the FSA and fined £500,000. But a furious Cummings said: "This is tokenism at its most sinister, and has made it feel throughout like institutional oppression." |
| Latterly his health has deteriorated and he only gave evidence to the banking commission at a closed session near his Glasgow home. | Latterly his health has deteriorated and he only gave evidence to the banking commission at a closed session near his Glasgow home. |
| A year ago the FSA made clear HBOS itself, now part of Lloyds Banking Group, would have faced a "very substantial penalty" had it not been rescued by with financial support from the taxpayer. However, the regulator stopped short of direct criticisms of Cummings' former bosses by name. | A year ago the FSA made clear HBOS itself, now part of Lloyds Banking Group, would have faced a "very substantial penalty" had it not been rescued by with financial support from the taxpayer. However, the regulator stopped short of direct criticisms of Cummings' former bosses by name. |
| What does he say? | What does he say? |
| "I am absolutely heartbroken about what happened, and I live with it every day, but it would be inappropriate of me to point the finger at any colleague." | "I am absolutely heartbroken about what happened, and I live with it every day, but it would be inappropriate of me to point the finger at any colleague." |