Sir Victor Blank quits Lloyds Banking Group

Lloyds Banking Group has confirmed that Sir Victor Blank will not be standing for re-election as chairman when his term ends next year, although in reality he is likely to leave much earlier than that.

His decision has sparked speculation over who will take over in the role, after he oversaw the highly controversial merger with HBOS. The group is now 43 per cent-owned by the UK taxpayer, needing government funds to continue as a viable entity.

Lloyds immediately appointed Lord Leitch as deputy chairman to help the handover process, although he is not thought to be a front-runner for the post of chairman.

After holding a board meeting yesterday morning, Lloyds issued a statement saying: "The board was unanimous in wanting Sir Victor Blank to seek re-election as chairman for another three years. We are very sad about Sir Victor's personal decision to retire, although we respect and understand his reasons for it."

Blank, previously a respected industry figure and a friend of Gordon Brown, would have faced a potentially difficult re-election vote next month had he stayed on.

Some of the bank’s biggest shareholders were unhappy about the direction in which it has gone, with the HBOS merger diluting their shareholdings and sending the price tumbling.

Since the tie-up the full extent of the loan-related problems at HBOS has become apparent and led to bad corporate loans pushing it into loss this year.

WHAT THEY ARE SAYING
Patrick Hosking, the Times: "No one handed Sir Victor a bottle of Scotch and a loaded revolver, says one source familiar with UK Financial Investments (UKFI), the body which looks after the taxpayer’s 43 per cent stake in Lloyds. He wasn’t explicitly forced to quit. But it’s nevertheless clear that the Lloyds chairman was told where the drinks tray could be found and was not discouraged from wandering off in the direction of the gun room. By letting him know he could not count automatically on its votes at the annual meeting next month, UKFI left Sir Victor in little doubt he had to do the decent thing."

Comment, FT: "In the longer term, there are also question marks over Lloyds’s future in its current shape. The competition authorities are uneasy about the creation of a bank that dominates the domestic market to such an extent. The government’s main priority will be to earn some kind of a return on the tens of billions of pounds it has injected into Lloyds and Royal Bank of Scotland. Sir Victor’s departure is a first step in what is likely to be Lloyds’s long path to rehabilitation in the public markets." ·