Lloyds should be allowed to keep HBOS, outgoing CEO claims

26 November 2010

The UK’s coalition government should allow Lloyds Banking Group to remain merged with HBOS, the former’s outgoing chief executive officer (CEO) has said.

In an interview with the Financial Times (FT), Eric Daniels claimed that the new authority was duty bound to honour the agreement set up by the previous Labour government.

According to reports, an independent banking commission could reverse the deal and request the group be broken up.

Mr Daniels told the FT: “One of the things that characterises most modern governments is that when you make an agreement with the state, it’s an agreement with the state independent of which political party is in power.

“There was a sentiment [then] that financial stability was more important and that the issue of competition took second place. As a result of that, the secretary of state signed off the deal. That is a matter of public record.”

The takeover of HBOS occurred in 2009 during the global financial crisis and left Lloyds reliant on government stimulus to stay afloat.

Lloyd’s recently announced that Antonio Horta-Osorio, Santander UK’s CEO, will be taking over from Mr Daniels when he relinquishes the post in March next year.

By Jim Ottewill

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