Who would want to chair Lloyds?
Nevermind whether the government wanted Sir Victor Blank to chair Lloyds Banking Group; why would he want to head a nationalised industry?
And who else will want that poisoned chalice?
Blank is a takeover lawyer who has made his name in the private sector at such companies as Charterhouse, GUS, Williams Holdings, Coats Viyella and Trinity Mirror. True, he damaged his name with a takeover of HBoS that lacked due diligence but even with the prospect of a peerage he joined Lloyds to run it as a private company, not an arm of the state.
He may have no-one to blame but himself (except for chief executive Eric Daniels) but the Lloyds board must wonder who pulls the strings now. (See Lloyds Share Price: LON:LLOY).
Like Barclays, it could probably have raised private-sector finance when the Treasury first ordered it to find new capital: the increased equity was only about 10 per cent. But that became a 43 per cent state stake when the HBoS merger went through and could reach 77 per cent under the current plan for the state to guarantee bad loans.
Lloyds still has a wide base of shareholders but it now answers to UKFI, the state agency that holds the majority stake. Or it answers to the Treasury that runs UKFI. Or to the whole cabinet with its agenda for using nationalised banks to implement business and employment policy. Or to Conservative politicians who could be entering Downing Street just as Blank leaves Lloyds.
What sort of businessperson wants to become head of Lloyds when so many other parties are telling him or her how to run the bank? Government has already intervened to dictate Lloyds’ policy on pay, dividends and lending. And on board composition, including now, the chairmanship.
Whoever accepts the role must not only face accusations that they are a puppet of the politicians or their agencies, they must curb their plans to suit the government while having every action open to public criticism because they are a part of the state.
Someone will accept, but the terms of the job instantly reduce the shortlist to a very special sort of businessman. And hopefully, not one there simply for the peerage. Blank may not like the circumstances of his exit but he may be happy to return to the private sector.
