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Angry investors call for heads of Lloyds bosses

By Simon Evans and Mark Leftly

City investors will heap further pressure on Sir Victor Blank and Eric Daniels to step down as chairman and chief executive of Lloyds Banking group this week after the taxpayer was forced to take a 65 per cent controlling stake in the bank yesterday.

After days of negotiations between Lloyds' management and Treasury officials, a deal allowing the bank to dump £260bn in toxic assets into a Government-backed insurance scheme was finally thrashed out.

Under the deal, the Government forces Lloyds to commit to £28bn in new lending over the next two years, while officials from the Government's UK Financial Investments arm, created to look after government bank stakes, will increase their presence on the board.

Lloyds is paying a fee to the Treasury of £15.6bn to take part in the Asset Protection Scheme.

But diluted equity investors in the Square Mile have been quick to vent their anger and are now calling for Sir Victor and Mr Daniels to quit.

"Their positions are untenable," said one leading investor. "Shareholders want blood. The perception is that Daniels, though clearly culpable, was caught in the middle. This was very much Blank's deal and I think he should go."

Despite the swelling City frustration, sources close to Lloyds say that neither Sir Victor nor Mr Daniels, would quit.

"We understand what the City is saying and I'm sure we'll have to experience some short-term anger, but their cries are rather academic," said the source. "Gordon Brown and the Government are backing the management. That's that."

The source said that Sir Victor, 66, remained "keen to see this thing through. Nobody wanted things to come to this but they have. We are now in the eye of the storm."

In January, Sir Victor said that Lloyds would continue to resist government control: "We can probably conduct our business better than the Government can conduct it for us."

John McFall MP, the chairman of the Treasury Select Committee, said he would be watching Lloyds to ensure that it meets its new lending requirement.

"We will be periodically monitoring that the lending is actually happening," he said. "Lloyds was actually run pretty conservatively, but the HBOS merger has been its downfall. However, there are synergies, and I would urge the market to take a long-term view of the bank's prospects," he added.

Michael Fallon, the Tory deputy chairman of the committee, said: "This is Brown's mistake. He was the one who changed the law. This [Lloyds –HBOS deal] is the most expensive cocktail party in history."

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[info]watcher22 wrote:
Sunday, 8 March 2009 at 03:02 am (UTC)
Hot on the heels of the US financial disasters led by their Chairman and CEOs the UK comes through with a couple of crackers - RBoS and now Lloyds. Next up, .....
Here we go again.
[info]rojaws wrote:
Sunday, 8 March 2009 at 08:37 am (UTC)
Why not force Victor Blank & Eric Daniels to retire on big, fat tax-payer funded pensions?
That seems to be the popular punishment for senior bankers that totally cock things up.
Beheading bank bosses
[info]frigalo wrote:
Sunday, 8 March 2009 at 08:40 am (UTC)
We are all angry at the way banks have behaved but Lloyds has been coerced by this Govt into the takeover. I think John McFall MP is right to say that people should take a more longterm view. In a few years Lloyds will be very powerful and successful but it takes guts to see such things through to the bitter end. All those with savings that are earning no interest have a right be angry though. If I could find a better hole I would crawl to it!
Am I supposed to be sympathetic?
[info]cm999 wrote:
Sunday, 8 March 2009 at 09:23 am (UTC)
IF the shareholders want blood then let them have it. But make sure that they sack those at the top so they dont walk away into the sunset with a golden parachute as seems to be the norm for total failure in the banking sector.

Of course I suppose it is too much to expect the shareholders to reflect on why they voted for the merger deal with HBoS. Presumably because they thought it would be a good investment and give them a healthy profit. The fact that has not transpired is as much there fault for agreeing to it as it is the head honchos at the bank
Angry investors call for heads
[info]theolderb wrote:
Sunday, 8 March 2009 at 10:17 am (UTC)
"..Sir Victor, 66, remained "keen to see this thing through.." Doesn't that sound terribly familiar somehow? Oh yes, it's what Ministers say when their departments are seen to have 'cocked things up'!
Sir Victor and Mr. Daniels
[info]rwkent wrote:
Sunday, 8 March 2009 at 11:57 am (UTC)
My! my! we have been bad boys. Haven't we? Yes they should be given the honor to quit in low key form. However they will not. Why should they, only there circle is in the know. Thats how they got us into this mess. While Warren Buffet and friends found that GM has a new electromagnetic motor and went to China with a earlier patent, Expired in the states by a Dr. Edwin V, Gray. in 1975 july 17th.
Can you imagin that in 1975 we could of worked for a cleaner and safer city and planet. While Wrren and Sir Victor stach almost 10% of There money into BYD.FF now about 2 bucks a share. You don't have to believe me follow the money is the best. Mr. Madoff and friends also have a large share in this China based company and I've not been on a through enough track to lace him to Sir Victor and Mr. Daniels. (Mercer, Callagan Investments got how much of your money?)
So out they should go and no chance of goverment work again what so ever. The BYD.FF stands for
Build Your Dreams.FF/ Freeze there off shore accounts and review what is visable to property owned.
Long Live The Queen.
Mr. RW Kent
[info]mr_scummy wrote:
Sunday, 8 March 2009 at 12:28 pm (UTC)
I expect the main reason that Blank, Daniels and the other faceless board members are clinging on is nothing to do with the good of the company - it's simply to ensure they have time to vote through each others' "discretionary" bonuses, pay-offs, pension payments and any other contractual perks they can grab before departing.
Lloyds
[info]asurbanipal wrote:
Sunday, 8 March 2009 at 02:00 pm (UTC)
Surely it was our esteemed Prime Minister who forced this unhappy union ? Everything that Brown touches is doomed. Can anyone point to anything the man has done which is not doomed from the outset to failure. No wonder he bites his finger-nails.
Hindsight
[info]rants_a_lot wrote:
Sunday, 8 March 2009 at 03:25 pm (UTC)
It must Have seemed like a golden oppotunity, pick up a rival UK bank for a song only to discover said back had lost 10.8 billion.