Expect bad news from Scottish banks next week – and its starting now

Lloyds TSB have just announced that nine of the top eleven jobs which will operate if the proposed merger takes place will go to managers from within its own organisation with only two going to former HBOS people.

Eric Daniels, CEO of Lloyds and already named as CEO of the giant bank that would emerge from the takeover says: ‘We had to make a judgment around who would be able to be most successful in leading this much larger, much more complex organisation. The process was absolutely impartial’.

The two HBOS executives to be appointed to designate senior roles are Harry Baines, slated for General Counsel and Company Secretary of the new bank; and Jo Dawson, who is to be Director of the new Wealth and International division.

In another serious blow to Scottish hopes, there will be only one member of the senior management hierarchy based in Edinburgh. He is Archie Kane, to be Group Executive Director of Insurance. He currently runs Lloyds TSB’s Scottish Widows business and is already based in the city.

Sir Victor Blank, chair of Lloyds TSB has already been announced as the designate Chair of the new bank.

National pride apart, it’s hard to argue with this coming landscape in the context of HBOS’s performance, fuller details of which will emerge next week – as we report below and have, uniquely in Scotland, covered before.

Next week will see trading updates from HBOS, Royal Bank of Scotland and Lloyds TSB . There will also be more information on the capital Lloyds and RBS are raising from UK taxpayers. And there’ll be more on the takeover of HBOS by Lloyds. as shareholders in both companies start to play an active part,moving towards the point where they approve or reject the proposed takeover.

Expect the results from both HBOS and Royal Bank to be bad. There will be wider public focus on a matter on which to date, For Argyll has been the only news service in any medium in Scotland to comment. This is what we called ‘the back story’ on the HBOS collapse, in an earlier report.

This is about a little talked-of but significantly more toxic lending than sub-prime mortgages and one to which HBOS has a massive exposure. Read our earlier article. This situation will have to emerge next week so expect some shocks.