Former HBOS chief exec apologises for failure
Sir James was called to appear before the parliamentary commission on banking standards committee yesterday because, said the committee, “it is the big bank failure which has not yet been addressed by an FSA report”.
The committee asked Sir James if he had apologised for the failure of the bank which it described as “catastrophic” at which he replied that he had not had the opportunity but would like to take it now.
He said: “I am very sorry for what happened at the bank.”
When pushed for a thorough explanation of why he was saying sorry Sir James said: “I am apologising for the fact that I played a major part in building a business that subsequently failed. I wasn’t there for the last few years but I think it would be wrong to disassociate myself from what happened in the end.”
Sir James stood down in 2006 three years before HBOS was taken over by the Lloyds Banking Group and over a period of five years he received almost £8m in salary and incentives. He left the bank with an index-linked pension of £572,000 a year.
The chairman of the committee, Andrew Tyrie, asked Sir James if he volunteered to waive any of his remuneration or pension as Fred Goodwin, Denis Stevenson and Andy Horby had.
Sir James said he did not offer to waive his salary or incentives because they were earned over a substantial number of years.
Tyrie described how the collapse of the bank “hit” the tax payer for £20bn and three million Halifax shareholders “who lost virtually everything”.
Tyrie continued to chastise Sir James for not offering to relinquish some of his HBOS fortune and said the public could forgive mistakes but did not expect people to profit for them.
The ex-chief executive said he sold approximately two thirds of his shares in the bank at some point between his departure in 2006 and the failure of the company.
This prompted Tyrie to highlight that Sir James had got out just before the crash which he admitted was correct albeit unknowingly.