U.K.’s Cable May Ban HBOS’s Former Directors, Sunday Times Says
U.K. Business Secretary Vince Cable is studying whether three former directors of HBOS Plc can be banned from serving as company directors after being blamed for the banking group’s failure, the Sunday Times reported, citing an interview.
The lender required a 28 billion-pound ($42.9 billion) rescue and a panel of lawmakers said April 5 regulators should consider barring former Chairman Dennis Stevenson and ex-Chief Executive Officers James Crosby and Andy Hornby from the finance industry.
Cable has asked officials to probe the evidence against the trio as the first part of the process required to strip people of access to company directorships, the Sunday Times said.
“It’s quite a legalistic process,” Cable told the newspaper. He said he was “surprised” Hornby and Stevenson were “still active” in companies.
Almost five years after the rescue, the U.K. lawmakers report singled out Stevenson, Crosby and Hornby for embarking on an aggressive expansion strategy, “incompetent” lending and their failure to understand and manage the risks they were taking. By focusing on risky commercial real estate, leveraged loans and funding for entrepreneurs, HBOS ran up bigger loan losses than any U.K. counterpart, forcing it to be rescued, the panel said in a report that branded the company as a “manual for bad banking.”
So far, the only HBOS executive to be banned from the industry for life is Peter Cummings, who ran the corporate unit responsible for most of the bank’s losses.
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