Sir James Crosby said last night he was not going to talk about the "observations" of fellow former HBOS directors Sir Peter Burt and Andy Hornby relating to the running of the bank during his time in charge.
Sir James Crosby said last night he was not going to talk about the "observations" of fellow former HBOS directors Sir Peter Burt and Andy Hornby relating to the running of the bank during his time in charge.
Crosby, who stepped down as deputy chairman of the Financial Services Authority last week after revelations at a Treasury Select Committee hearing about the dismissal of an HBOS risk management executive who claimed to have advised Crosby and his board to "slow down", told The Herald there would be a "right time"
to talk about his time heading HBOS but it was "not at the moment".
The government last September brokered a rescue of HBOS through a takeover by Lloyds TSB. This takeover, which formed Lloyds Banking Group, was completed last month.
Burt, co-architect of HBOS with Crosby through the merger of Bank of Scotland and Halifax in 2001, this week blamed "greed" for the over-expansion of the bank.
Defending his role in creating a merged bank that became over-dependent on the whole-sale funding markets, Burt told The Herald that "wholesale funding was relatively low" at the time of the merger.
He highlighted rapid expan- sion of lending by noting the merged bank's assets had grown from £400bn in 2003 to £666bn in 2007, and added: "Obviously they didn't manage to keep the ratios where they were at the time of the merger. They just got it wrong. They just got greedy."
Burt was chief executive of Bank of Scotland at the time of the 2001 merger. He became executive deputy chairman of HBOS and left the bank in January 2003.
Crosby was chief executive of HBOS until July 2006.
Hornby, who succeeded Crosby, claimed at the Treasury Select Committee last week that he stopped share buy-backs and took action to reduce HBOS's mortgage market share after becoming chief executive.
However, as The Herald revealed last week, statements made to the stopck mar- ket by Hornby and HBOS between December 2006 and February 2008 give an impression entirely at odds with that which Hornby gave to the treasury committee.
Crosby, when it was put to him by The Herald last night that the remarks by Burt about greed and getting it wrong and Hornby's claims about action taken after July 2006 both signalled a view on his time in charge, replied: "I am not going to comment on either of these observations."
Asked if he cared to make a general comment about his time in charge of HBOS, Crosby replied: "I am not going to comment on that at the moment. There will be a right time for that, but it is not at the moment."
Hornby told MPs last week that, after his appointment as chief executive in July 2006, "the first move we took was to stop share buy-back programmes in order to preserve capital". In fact, Edinburgh-based HBOS announced another £500m buy-back programme in December 2006.
In his report on HBOS's 2007 results, published on February 27 last year, Hornby said: "We enjoyed an extremely strong second half in the mortgage market with our net share of lending increasing to 22%, up from 8% in the first half."
Hornby told the treasury committee last week that "we pulled back further on our mortgage market share"
after he became chief executive.
A Lloyds spokesman, speaking last week on behalf of Hornby, said that HBOS's full-year mortgage market share had fallen in 2007.
However, this fall was the result of what HBOS made clear at the time was an unplanned drop in the first half of that year.
Lloyds confirmed last night that Hornby had "voluntarily agreed" to end his £60,000- a-month, "short-term con- sultancy arrangement" with the bank at the end of February.
Hornby moved to a consultancy role after the completion of Lloyds' takeover of HBOS around the middle of last month.
He was questioned about this at last week's treasury committee meeting, and declared it would last no longer than three months.
Asked by The Herald why Hornby's consultancy arrangement was now concluding at the end of this month, Lloyds replied: "It was always a short-term contract in any event and his work is done."
The massive extent of HBOS's troubles became ever clearer last Friday when it emerged the bank had suffered an £8.5bn underlying loss for 2008 - even worse than Royal Bank of Scotland's £7bn-£8bn pre-exceptional figure.
Throwing in various charges viewed as exceptionals, HBOS's loss last year swells to about £10.9bn.
