Page last updated at 15:49 GMT, Thursday, 20 November 2008

Bankers 'abandon' HBOS campaign

HBOS sign
The two bankers wanted HBOS to remain independent

The two leading bankers who had hoped to stop Lloyds TSB taking over HBOS appear to have abandoned their plan.

Sir Peter Burt and Sir George Mathewson wanted to force the chairman and chief executive of HBOS to resign.

But their website, asking shareholders to support their bid, has been closed down. It now carries a message saying a statement will be issued shortly.

It comes after Lloyds TSB shareholders voted in favour of taking over HBOS and accepting government bail-out money.

Sir Peter, formerly of the Bank of Scotland, and Sir George, ex-head of the Royal Bank of Scotland, had argued that HBOS could remain independent if it were to take the government's bail-out money without merging with Lloyds TSB.

Earlier this month the two said that they should lead HBOS and that they intended to canvas shareholders.

But Chancellor Alistair Darling said on Tuesday that attempts by any of the banks to renegotiate the 37bn bail-out of the banking sector could prove costly for shareholders.

He said that access to the government deal was not "automatic" and that any bank seeking a new package risked getting a far lower share price than when the offer was first made.

BBC business editor Robert Peston predicted this would persuade the two senior bankers will walk away from the furore.

New shares

The message on their website reads: "In light of the chancellor of the exchequer's statement on 18 November 2008, we will be making a statement shortly."

At a meeting in Glasgow on Wednesday Lloyds TSB shareholders voted 95.98% in favour of the takeover. They also approved plans to raise 5.5bn by issuing new shares and special preference shares.

HBOS shareholders will vote on the deal to create a banking giant with 145,000 staff and 3,000 branches next month.

The government has allowed the takeover of HBOS by Lloyds TSB to bypass normal competition rules.

At the dawn of a recession, Scottish business has found itself raided by the banks and abandoned by Labour and the Treasury
Tavish Scott
Scottish Liberal Democrat leader

When the deal was originally announced in September, the government backed the deal using a special national interest clause on the grounds that a collapse of HBOS would have had a disastrous impact on the UK.

Meanwhile, Scottish Liberal Democrat leader Tavish Scott urged banks to drop "punishment charges" on small businesses to curb rising repayment levels.

He also called on the Scottish Government to create a banking jobs taskforce, telling the Scottish Parliament: "At the dawn of a recession, Scottish business has found itself raided by the banks and abandoned by Labour and the Treasury."

Deputy First Minister Nicola Sturgeon, standing in for Alex Salmond at question time, agreed that small businesses were suffering.

She went on: "The key player in this is the UK Government, who have taken a decision to put significant amounts of taxpayers money into our banks.

"I would've thought that all of us should be demanding that the condition of that was a return to 2007 lending conditions."

Print Sponsor


The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Americas Africa Europe Middle East South Asia Asia Pacific