Had I been a Lloyds shareholder I would have voted against the merger with HBOS. At the time I called on the Competition authorities to block the merger, and advised shareholders to vote against it. We have now seen the huge losses of HBOS, and are beginning to see the damage it has done to Lloyds.
Sir Victor’s decision to step down in due course is a good one. UKFI, the holder of the taxpayers’ shares, now does not have to decide whether to support him. Lloyds/HBOS needs leadership that can root out bad business, cut costs, and stabilise the loan books. It needs to sell assets, raise some more cash, and concentrate on deposit taking and lending on a prudent basis. The architect of the last mega merger of the old era is not the right man to carry out that crucial work. Taxpayers need the reassurance that the bank is now going to be run on a more restrained basis.
Sir Victor was encouraged to do what he did by the government. I do not expect to see a Treasury Minister also announce their departure, or any apologies from them over their misguided agreement to this deal.