Sir Victor Blank is believed to be close to stepping down as chairman of Lloyds Banking Group following pressure from investors furious about the bank's rescue of HBOS.
Sir Victor is expected to announce over the next day or so that he will resign from Lloyds, but that he will stay on until a successor is found. Investors blame him for the disastrous HBOS takeover last autumn which has plunged Lloyds into losses of around £10bn in the last year, forcing it to go to the Government for a bailout and leading to a crash in its shares price.
Several of the biggest investors in Lloyds have been arguing ever since that Sir Victor's scalp was the price to be paid for the ill-judged merger.
Erick Daniels, the chief executive of Lloyds, has also been under pressure since he told shareholders that the board had not had time to do proper due diligence of HBOS's accounts prior to the rescue.
The takeover was hatched during the height of the financial crisis when Gordon Brown decided to waive the usual Competition Commission criteria. At the time, Sir Victor assured investors that the merger between the two banks was the "deal of a lifetime" which would create a British champion and that the value of the merger would come through in a few years. However, the merged bank has had to sack thousands of staff and plans to close hundreds of branches.
The Government, through UK Financial Investments, owns 43 per cent of the new group and is thought to have come under pressure from the City to ask Sir Victor to step down. One investor said: "Someone had to take the blame for this deal, which is bad for shareholders and staff, and ultimately banking customers. It came down to Sir Victor and Eric, but as Victor pushed through the deal, his head has to go."
Sir Victor and Mr Daniels are understood to have been at loggerheads for weeks and some investors said it was only a matter of time before one of them went.
It is thought that Sir Victor finally decided to step down to ensure a smooth transition and to take the heat off the Lloyds board. Investors were likely to have made a more vocal protest at next month's annual meeting and Sir Victor may have wanted to avoid that embarrassment.
Sir Victor, a lawyer by training, became chairman of Lloyds TSB in early 2006.Reuse content