Sir Victor to step down as Lloyds chairman

18th May 2009 07:01

Sir Victor Blank announced that he is planning to step down as chairman of Lloyds Banking by June next year, following continuing criticism of his bank's ill-fated purchase of rival HBOS.Lord Leitch has been appointed as deputy chairman with immediate effect. "I believe it is the right time for the group to appoint a new chairman," said Sir Victor. "I will continue working until my successor is appointed to ensure the successful integration of the two banks. This remains - in the medium term - a unique value-enhancing opportunity." Sir Victor's resignation was accepted at a board meeting on Sunday after growing speculation that shareholders would vote against his re-election at the AGM. He engineered the HBOS deal with the help of Gordon Brown last year and has been facing criticism for creating an institution that is now 43% owned by the taxpayer. The combined group said at the start of the month that it predicted at least a 50% rise in corporate impairments in 2009, mainly due to HBOS. Lord Leitch, who is seen as the favourite to takeover permanently from Sir Victor, said the board was unanimous in wanting Sir Victor 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."In a separate statement, the bank confirmed it has agreed with the Treasury to launch the previously announced placing and open offer on 20 May. The proceeds will be used to redeem the £4bn of preference shares held by the Treasury.Existing shareholders will be able to subscribe for 0.6213 new shares for every one held in Lloyds at an offer price of 38.43p. "Any proceeds raised in the rump placing in excess of the 38.43 pence open offer price will be distributed on a pro rata basis to those shareholders who did not participate in the placing and open offer," said the group.The group also said discussions and negotiations with HMT to finalise its participation in the Government Asset Protection Scheme continues and are expected to be concluded in the next few months.