Former HBOS chief in shock comeback

After being said by some to have precipitated the banking crisis in his position at the helm of UK bank HBOS, Andy Hornby is set to make a surprise return. His new position will be as chief executive of pharmacy group Alliance Boots, which is owned by US private equity company Kohlberg Kravis Roberts.

Executive chairman Stefano Pessina said yesterday that "Alliance Boots confirms it is currently engaged in discussions with Andy Hornby, who is a leading candidate for the role [of chief executive]. It hopes to complete the process shortly and a further announcement will be made at that time."

It is understood that Hornby is a shoo-in for the role, a decision which will anger many of those connected to HBOS and were affected by its demise last year. Shareholders and workers all lost out as the bank was pushed to the brink of financial collapse under Hornby's stewardship, before it was rescued in a merger with Lloyds TSB.

Hornby was forced to admit to a Treasury select committee earlier this year that his strategy of increasing property lending aggressively during the boom years was to blame for the bank's troubles.  He apologised for his role in the debacle, but his legacy has been played out since, in Lloyds Banking Group’s continuing woes.

Alliance Boots was taken private in 2007 before the credit crunch hit, in a £12.4bn deal which led to the chemist chain being loaded with debt. Although it has performed well so far, like other heavily indebted groups it has its problems.

WHAT THEY ARE SAYINGRobert Peston on BBC.co.uk: "Hornby is likeable and self-effacing. There's just that slight problem of having broken quite a substantial bank. He's almost certainly unemployable at a substantial publicly listed company: the big investment institutions wouldn't have him in a business they control (or so leading headhunters and brokers tell me). But Alliance Boots is a private business and can do what it likes."

Liberal Democrat Treasury spokesman Lord Oakeshott in the Guardian: "Private equity asset strippers have taken over Boots and loaded it up to the eyeballs with debt. They should learn the lessons of HBOS's collapse under Mr Hornby and pay off their borrowings to make Boots strong again." ·