Crosby departs on high note at HBOS

James Crosby has been on a winning streak since leading Halifax into its transformational tie-up with Bank of Scotland in 2001.

After orchestrating one of the biggest mergers in UK banking history, the 49-year-old Yorkshire man has seen profits double at HBOS and shares hit a series of all-time highs.

Under his leadership, HBOS has become the largest UK provider of new investment products, accounting for £1 (€1.40) in every £8 (€9.70) of new products. It has also held on to its title as the UK’s biggest mortgage and savings provider.

The Oxford graduate, who is married with four daughters, is an actuary by trade and spent 10 years in fund management before joining Halifax as managing director in 1994. He has spent seven years as chief executive of Halifax and HBOS.

Experts say much of the group’s retail success has been down to Mr Crosby, who has managed to win over the support of the 22 million customers who bank with HBOS.

He has also pleased the group’s army of investors with a share buyback programme, as HBOS chose a strategy of organic growth rather than pursuing a big-money takeover in the way rival Royal Bank of Scotland has done in recent years.

HBOS was on the brink of a rival bid for Abbey National in 2004, but stopped short of an offer – even though a combination of the two banks would have given HBOS 34% of the UK mortgage market and almost 25% of savings accounts.

At the time analysts praised HBOS for its financial discipline, believing the price the group would have had to pay to defeat Santander was too high.

Today’s news that Mr Crosby plans to quit the group in the summer comes just a week after HBOS shares hit an all-time high of 993p, after increasing by 17.5% during the course of 2005.

Ian Gordon, analyst at Dresdner Kleinwort Wasserstein, said: “Under James’ leadership, HBOS has become a major force in UK banking.

"HBOS is widely regarded as the consumer champion, but perhaps the real legacy of the Crosby era is that HBOS has now established itself as a shareholder champion.”

Mr Crosby, who is a cricket fan and enjoys playing tennis, has not revealed what he plans to do next, but said today that it was the “right time” for somebody else to take HBOS forward.

In addition to his role at HBOS, he is also a non-executive director of ITV and the Financial Services Authority. He earned £1.3m (€1.6m) in pay and bonuses from HBOS in 2004.