The chairman of Lloyds Banking Group, Sir Victor Blank, has announced that he is stepping down from his position effective as of June 2010.
After a meeting with the board, Sir Victor announced that he thought it was the “right time for the Group to appoint a new chairman.”
According to Lord Leitch, the Groups deputy chairman, the board is “very sad” about the decision.
Sir Victor, along with Lloyds’ chief executive Eric Daniels, have faced criticisms for their decision last year to buy HBOS, the owner of Halifax, putting Lloyds into serious financial trouble and forcing the UK treasury to buy 43% of it.
Not Forced Out
Sir Victor says he still has a lot to do, but denies being forced to resign due to pressure from shareholders.
In the statement that he released after the meeting, he said that he would continue his position until a new chairman has been appointed in order to “ensure the successful integration of the two banks.
“This remains – in the medium term – a unique value-enhancing opportunity,” he added.
Mr Daniels also said that his co-worker had played a very important role “during a period of significant change for our company and at a time when there has been unprecedented volatility in the markets.”
One Too Many Mistakes?
HBOS’s loss in 2008 was almost £11 billion, but Lloyds TSB made a profit of £807 million in the same year, which was an 80% fall on their previous years’ profits, but still better than competitors.
The two banks joined are expected to make a substantial loss this year.
Earlier this year, the government also agreed to insure £260 billion of the banks toxic loans as well as possibly raising their stake in the bank to 65%.
This deal was part of the governments taxpayer-backed Asset Protection Scheme to insure banks’ most risky investments from further losses after the credit crisis.
Lloyds’ directors say they don’t believe Sir Victor is being forced to leave by shareholders. However, Robert Peston of the BBC says he believed that the UK Financial Investments (UKFI) is aware of other shareholders beliefs that there had to be a change at the top of Lloyds.
He said: “I am now persuaded that the UKFI would have voted its 43% (that’s taxpayers’ 43%) against him staying on.”
The board was apparently “unanimous in wanting Sir Victor Blank to seek re-election as chairman for another years,” according to Lord Leitch
“We are very sad about Sir Victor’s personal decision to retire, although we respect and understand his reasons for it.
“Sir Victor is a first-class chairman and we are delighted that he will continue with us to ensure an orderly succession and the continued integration.”
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