Grandees behind the marriage of two banking giants
Thursday 18 September 2008
The rescue of Halifax Bank of Scotland was overseen by two of the City of London's grandest names, with support from the banks' chief executives who have both seen their reputations turn 180 degrees in the past year.
The merger talks between HBOS and Lloyds were marshalled by Lord Stevenson and Sir Victor Blank, two highly experienced non-executives who command huge respect in Britain.
The Cambridge-educated Dennis Stevenson's background is in consultancy, and he set up his group SRU in 1972. He has been called a "fixer", and has a strong involvement in politics, business and the arts. The peer has a series of directorships, including at Lazard, J Rothschild Assurance and BSkyB and has held positions ranging from governor of the London School of Economics to chairman of the trustees of the Tate Gallery during the building of Tate Modern.
He was appointed chairman of Halifax in 1999, two years after becoming the chairman of the Financial Times publisher Pearson. Following Halifax's merger with Bank of Scotland in September 2001, he stepped up to take the chair of the overall group. He is also chairman of the House of Lords Appointment Committee. He became Lord Stevenson of Coddenham in 1999.
His counterpart at Lloyds is Sir Victor Blank, who became the youngest partner at law firm Clifford Chance, then Clifford Turner, when he joined in 1969. He subsequently moved to Charterhouse Corporate Finance, which would later become part of HSBC, and became chairman and chief executive of the group in 1985.
In his near-40-year career in the City, he has chaired the boards of the media group Trinity Mirror and GUS, the retailer that owned Burberry, Argos and Homebase and split in 2006.
Also locked in the negotiations were the HBOS chief executive, Andy Hornby, and Eric Daniels at Lloyds. Mr Hornby was feted when he was appointed chief executive of HBOS in 2006 aged 38. The bank battled hard to keep the man who came top of his MBA class of 800 in Harvard, offering a £2m bonus scheme to prevent his being poached. Yet his stock has fallen with the bank's.
Mr Hornby began to feel the pressure in earnest earlier this year, when the bank announced £2.8bn treasury losses and was forced to turn to its shareholders to raise £4bn to strengthen its capital base. As the disquiet has grown, investors have claimed he was out of his depth, and criticised his background as a retailer at Asda rather than as a banker. The "golden-boy" tag has withered to the point where Lord Stevenson had to leap to his defence. He called Mr Hornby one of the "toughest, one of the most decisive chief executives of any bank in the world".
Eric Daniels has also seen a reversal in his fortunes. "The quiet American" was yesterday being hailed as the potential saviour of the UK banking system.
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