Two former Scottish bankers conceded defeat today in their battle to force a rethink on the Halifax Bank of Scotland takeover by Lloyds TSB.
The former heads of Bank of Scotland and Royal Bank of Scotland, Peter Burt and George Mathewson, had called on HBOS to abandon the deal and install them as chief executive and chairman.
They argued that the planned sale was no longer needed and that HBOS could remain independent by using the government’s recapitalisation scheme.
Their withdrawal had been expected after UK Chancellor Alistair Darling said this week there was “no automatic right of access” to the scheme, adding that banks needed a sustainable business model, clear funding lines and credible senior management.
In a statement the pair said today: “The Government’s statement has raised several hurdles very high and has made it crystal clear that they do not want and are not prepared to facilitate HBOS remaining independent.
“Accordingly Peter and George reluctantly decided to discontinue their campaign.”
The pair said their proposals, which were rejected by the HBOS board, attracted “encouraging and increasing levels of support, not least in financial terms”.
They added: “Although there was no prospect of raising all of the £11.5bn (€13.6bn), which will be required to strengthen the new Lloyds Bank, from private sources we had offers of additional capital that would have raised more than the extra £500m (€595m) needed to keep HBOS independent.”
The statement said an opportunity to keep HBOS independent, albeit with the UK government as the major shareholder, had been lost “along with thousands of jobs”.