Ex-HBOS boss Crosby offers back knighthood

Former HBOS chief executive James Crosby has stepped down as non-executive director of catering firm Compass Group and said he wants to be stripped of his knighthood in the light of last week’s scathing report into the bank’s collapse.

Crosby , who also said he was to give up 30% of his £580,000-a-year pension, still holds the knighthood as he cannot himself renounce the title.

The bank’s former boss was given a knighthood after leaving HBOS in 2006, but said he believed “it is right that I should now ask the appropriate authorities to take the necessary steps for its removal”.

Crosby , who stepped down from his role with private equity firm Bridgepoint on Friday, said he was “deeply sorry” for what happened at HBOS and the “ensuing consequences” for the bailed-out bank’s staff, shareholders and taxpayers.

For the knighthood to be withdrawn, the British Honours Forfeiture Committee has to make a recommendation to Prime Minister David Cameron, who then passes it on to the Queen for a decision.

The committee meets on an ad-hoc basis when a request is made for an honour to be reviewed – a request anyone can make.

A Cabinet Office source said: “If he was to write to the Forfeiture Committee himself, the committee would take that very seriously.”

The Parliamentary Commission on Banking Standards claimed in Friday’s report that Crosby was the “architect of the strategy that set the course for disaster” and held primary responsibility for the collapse along with former chairman Lord Stevenson and fellow chief executive Andy Hornby.

Their “toxic” misjudgments were blamed for the bank’s downfall and £20.5bn taxpayer bailout at the height of the financial crisis and the commission said they should not be allowed to work in the financial sector again.

Crosby said the report made for “very chastening reading”.

He added: “Although I stood down as CEO of HBOS in 2006, some three years before it was taken over by Lloyds, I have never sought to disassociate myself from what has happened.

“I would therefore like to repeat today what I said when I appeared in public before the Commission in December; namely that I am deeply sorry for what happened at HBOS.”

His decision to forgo 30% of his pension will still leave him with an annual payout worth £406,000.

He said he was also standing down from his voluntary position as a trustee of Cancer Research UK with “great personal sadness”.

It is understood he remains chairman of car credit company Money Barn.

Crosby was chief executive of HBOS from 2001 to 2006 and former deputy chairman of the Financial Services Authority (FSA).

The three former bosses who ran HBOS in the run-up to its dramatic collapse were found to be ultimately to blame for “catastrophic failures of management”, according to the commission’s report.

Lord Stevenson also came under heavy fire, having infuriated the commission by claiming reckless lending at HBOS was not his fault because he was “only there part time”.

The commission said it was wrong that Peter Cummings was the only former HBOS director to have been penalised by the FSA after being fined £500,000 and banned for life from working in the City last September.

It called on the new City regulator to consider barring Crosby, Hornby and Lord Stevenson from taking up any role in the financial sector.

But the commission’s chairman Andrew Tyrie refused to say whether he would like to see Crosby or Lord Stevenson lose their titles.

Compass chairman Roy Gardner said last night: “On behalf of the board, I would like to thank James for the significant contribution he has made to the company over the last six years.”

Michael Pragnell, chairman of Cancer Research UK, said: “I fully respect James’ decision to step down as a trustee and, on behalf of the charity, would like to thank him for his active support over the past five years and wish him well.”