Former HBOS Plc Chairman Dennis Stevenson’s testimony was called “evasive” by the Parliamentary Commission on Banking Standards head Andrew Tyrie, probing the bailout of Britain’s biggest mortgage bank.
“Some witnesses have been very frank with us and it’s been clear to us from their evidence that they have been looking the reality of this catastrophic series of events in the face and some haven’t,” said Tyrie today at a hearing of the Parliamentary Commission on Banking. “You’ve been evasive, repetitive and unrealistic.”
Lloyds Banking Group Plc (LLOY), which agreed to buy HBOS in 2008, had to subsequently seek a 20 billion-pound bailout that gave the government a 43 percent stake. HBOS’s assets more than doubled to 681 billion pounds between 2001 and 2008 as the U.K.’s biggest mortgage provider increased lending to entrepreneurs and real estate developers.
Stevenson was criticized for telling the Financial Services Authority he was an executive chairman in a January 2008 letter to the regulator even though he told today’s hearing that he was a part-time non-executive. Stevenson said his non-executive role meant he couldn’t be expected to be in full command of the financial details that led to the lender’s rescue.
“I deeply regret the mistakes made in the corporate lending book,” Stevenson said today. “With the wisdom of hindsight, I wish we could have done more to obviate them.”
Stevenson wrote to FSA former Chairman Callum McCarthy in March 2008 and said “HBOS in an admittedly uncertain and worrying world is in as secure a position as it could be,” according to an e-mailed copy of the letter. “This is neither a bravura, nor an ill-considered statement.”
The parliamentary commission is scheduled to publish its proposals for legislation by Dec. 18.
To contact the reporter on this story: Howard Mustoe in London at email@example.com
To contact the editor responsible for this story: Edward Evans at firstname.lastname@example.org