Former bank chief steps up HBOS campaign

The fight to push forward an alternative to the Lloyds TSB takeover of HBOS was stepped up today by a former bank chief who insists the current offer is "no longer the best deal".

Sir George Mathewson, ex-chief executive of Royal Bank of Scotland, is trying to convince shareholders they will not benefit from the Lloyds deal.

It emerged at the weekend that he and former HBOS chief executive Sir Peter Burt were seeking to oust the current chairman and chief executive in a move to thwart the Government-backed bid.

It has been resisted by HBOS which said Lloyds TSB offered "certainty".

But today Sir George told the BBC's Good Morning Scotland that two million small shareholders could receive as little as half the value they should, under current Lloyds TSB proposals.

He warned: "Because of a deal which was struck under necessity, when it appeared there could not be a better deal possible, we are now faced with thousands of people all over the UK losing their jobs as we enter recession and the creation of an absurdly huge, and in my view unsustainable monopoly, in one of our most important and sensitive markets."

Sir George claimed the description of Lloyds TSB as superior to HBOS was no longer certain.

And he said cash from a Government bail-out could be negotiated with HBOS on a "level playing field" with other UK banks.

"The deal is no longer the right deal," he said.

Sir George said he helped RBS grow from £1 billion to £50 billion in capital during his tenure.

Sir Peter orchestrated the Halifax merger with Bank of Scotland to create HBOS in 2001.

Asked if the pair were in some way responsible for the allowing the banks to get into the current situation, Sir George said: "These sorts of comments are probably from people who unfortunately, as far as I'm concerned, are a lot younger than I am."

The banking elders wrote a letter to HBOS on Friday, calling on chairman Lord Stevenson of Coddenham and chief executive Andy Hornby to step down.

Sir George told the BBC: "We have had quite a lot of support expressed to us but we have only released this letter on Friday night and let's just see what happens with this matter."