Government inquiry into HBOS payoffs

The corporate banking chief was paid £660,000 despite loss

The row over payments to disgraced bankers moved to HBOS yesterday as it emerged that the Government has ordered an inquiry into payoffs its executives have received.

Lloyds Banking Group, which bought HBOS last year as the mortgage giant teetered on the edge of the collapse, is close to completing a review of the terms on which senior HBOS executives left the bank. In particular, there is mounting controversy over a £660,000 payment made to Peter Cummings, the head of HBOS's corporate banking division, which was responsible for many of the bank's loans that have now soured – leading Lloyds to declare yesterday that HBOS made a £10.8bn loss last year.

Mr Cummings is understood to have received the payment in line with the terms of his contract, though other executives at the bank, including former chief executive Andy Hornby and Sir Denis Stevenson, the bank's former chairman, waived their right to severance payments when they left. Mr Cummings is one of the best-known figures in British banking, having built the corporate lending division into a powerhouse at HBOS. While the division was responsible for a sizeable proportion of HBOS's profits in better times, its huge exposure to the property market has lead to disastrous losses over the past year.

Mr Cummings, who is also thought to have a pension pot worth around £6m from his HBOS service, has links to many of the country's best-known business figures, having worked on deals with the likes of Sir Philip Green, the retail tycoon, Victor Tchenguiz, the property investor, Tom Hunter, the Scottish entrepreneur, and the Candy brothers, also major players in the property sector.

A series of big deals with such high-profile figures earned Mr Cummings the reputation of "banker to the stars", but he was forced to quit HBOS earlier this year when the scale of his division's losses became apparent.

Victor Blank, the chairman of Lloyds Banking Group, said yesterday that he did not yet know exactly what terms HBOS executives had left on. However, a spokesman for UK Financial Investments, the government unit set up to deal with the banks which are now state-owned, insisted Lloyds had been asked to review all payments made to those who had quit. "Lloyds agreed with UKFI last week that it would assure itself that all payouts to former HBOS directors were, as UKFI had previously been assured by HBOS, no more than was legally necessary," the spokesman said. "We understand that this process of thorough legal assurance is nearly complete." It is not yet clear whether HBOS executives received similar pension enhancements to the ones received by Sir Fred Goodwin, the former chief executive of Royal Bank of Scotland, who was allowed to retire, at age 50, on the £693,000 annual pension he would have received had he stayed at the bank until age 60.

Life and Style
Small winemakers say the restriction makes it hard to sell overseas
food + drink
Arts and Entertainment
A comedy show alumni who has gone on to be a big star, Jon Stewart
tvRival television sketch shows vie for influential alumni
Arts and Entertainment
Carrie Hope Fletcher
booksFirst video bloggers conquered YouTube. Now they want us to buy their books
News
Clare Balding
peopleClare Balding on how women's football is shaking up sport
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Arts and Entertainment
Damien Hirst
artCoalition's anti-culture policy and cuts in local authority spending to blame, says academic
Sport
premier leagueMatch report: Arsenal 1 Man United 2
Arts and Entertainment
Kirk Cameron is begging his Facebook fans to give him positive reviews
film
News
i100
Sport
Jonny May scores for England
rugby unionEngland 28 Samoa 9: Wing scores twice to help England record their first win in six
Life and Style
fashionThe Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Arts and Entertainment
Jason goes on a special mission for the queen
tvReview: Everyone loves a CGI Cyclops and the BBC's Saturday night charmer is getting epic
Arts and Entertainment
Jerry Hall (Hand out press photograph provided by jackstanley@theambassadors.com)
theatre
Sport
Tony Bellew (left) and Nathan Cleverly clash at the Echo Arena in Liverpool
boxingLate surge sees Liverpudlian move into world title contention
Voices
Neil Findlay
voicesThe vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Life and Style
food + drinkMeat-free recipes and food scandals help one growing sector
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Reach Volunteering: Financial Trustee and Company Secretary

Voluntary Only - Expenses Reimbursed: Reach Volunteering: A trustee (company d...

Recruitment Genius: Senior Project Manager

£45000 - £65000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Shopfitter

Negotiable: Recruitment Genius: This is an opportunity to join a successful an...

Recruitment Genius: Digital Sales Account Manager

£25000 - £30000 per annum: Recruitment Genius: A Digital Sales Account Manager...

Day In a Page

Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible
Look what's mushrooming now! Meat-free recipes and food scandals help one growing sector

Look what's mushrooming now!

Meat-free recipes and food scandals help one growing sector
Neil Findlay is more a pink shrimp than a red firebrand

More a pink shrimp than a red firebrand

The vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Bill Granger recipes: Tenderstem broccoli omelette; Fried eggs with Mexican-style tomato and chilli sauce; Pan-fried cavolo nero with soft-boiled egg

Oeuf quake

Bill Granger's cracking egg recipes
Terry Venables: Wayne Rooney is roaring again and the world knows that England are back

Terry Venables column

Wayne Rooney is roaring again and the world knows that England are back
Michael Calvin: Abject leadership is allowing football’s age-old sores to fester

Abject leadership is allowing football’s age-old sores to fester

Those at the top are allowing the same issues to go unchallenged, says Michael Calvin