THE cost of bailing out Halifax Bank of Scotland reached almost £30 billion, a damning Westminster report into the bank's collapse is due to say tomorrow, with those who ran it singled out for sharp criticism over their major management failings.
According to a leak of the report by the Parliamentary Commission on Banking Standards, Lord Stevenson, the HBOS chairman up to 2008; Sir James Crosby, chief executive until early 2007; and Andy Hornby, who held the post for the next two years; bear the brunt of the criticism – which is said to focus on the bank's poor governance and weak credit risk controls.
Peter Cummings, the former corporate banker who spearheaded a rapid expansion of business lending, is also said to be in the firing line.
One source described the report's findings as HBOS's "first mass blood-letting".
Last September, the Financial Services Authority (FSA) ended its investigation into the financial institution by fining and banning Mr Cummings but it took no action against others.
At the time, the 57-year-old banker from Dumbarton claimed he was being made a scapegoat after receiving a record £500,000 fine and a lifetime ban from holding a senior post in the industry.
Branding the FSA's process "fundamentally flawed, one-sided and oppressive", he called for an independent inquiry into HBOS's failure. The Scots banker said for the past three years he had been "singled out and subjected to an extraordinary Orwellian process by an organisation that acts as lawmaker, judge, jury, appeal court and executioner".
He added: "Many people must bear collective responsibility for what happened, including governments and regulators as well as the boards of the banks themselves. But the fact I am the only individual from HBOS to face investigation defies comprehension."
HBOS, created in 2001 from the merger of the Halifax and Bank of Scotland, became one of the biggest casualties of the financial crisis alongside Northern Rock and the Royal Bank of Scotland. When disaster struck in 2008 the bank requested an emergency multibillion-pound bailout and was subsequently merged with Lloyds TSB to create the Lloyds Banking Group.
The commission's report, its third, will be published ahead of its final conclusions, due in May.
Conservative MP Andrew Tyrie chairs the commission – made up of politicians, including MPs John Thurso and Pat McFadden, peers Lord Lawson, the former Chancellor, and Lord McFall, ex-chairman of the Commons Treasury Committee, as well as Justin Welby, the new Archbishop of Canterbury.
Last year, all the key players at HBOS gave evidence to the commission. Lord Stevenson apologised, saying he felt "awful" about the bank's collapse.
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