The UK Parliamentary Commission on Banking Standards has recommended that Andy Hornby, current CEO of UK bookies Coral and former CEO of Halifax Bank of Scotland (HBOS), be banned from ever holding a senior role in any financial firm. The recommendation came in a report into the 2008 collapse of HBOS, which resulted in thousands of redundancies and required a £20.5b taxpayer-funded bailout.
The report, titled An Accident Waiting To Happen, identifies Hornby and his predecessor as HBOS CEO, Sir James Crosby, as being chiefly to blame for the reckless financial trading that led to the bank’s collapse. Former chairman Lord Stevenson was also taken to the woodshed in the report. The report has called for the three execs to publicly apologize for the “incompetent and reckless” strategy the bank undertook under their stewardship.
The report identifies risky strategies established under Crosby and maintained by Hornby, “who proved unable or unwilling to change course.” The bankers have claimed that the 2008 global financial crisis was to blame for HBOS’ demise, but the report concludes HBOS’ dodgy loans would have resulted in its collapse regardless of external factors. “The combination of higher risk assets and risky funding represents a fundamentally flawed business model and a colossal failure of senior management.”
Hornby was just 38 when he assumed the CEO mantle at HBOS in 2006. In December, Hornby told the commission investigating HBOS’ downfall that “the sheer volume of information supplied by every division … made it harder for the board to fully understand the potential issues facing the business.” Coral, which hired Hornby in July 2011, sent out spokesman Simon Clare to say that Hornby was “doing a great job and we’re delighted with the job he is doing. He has the complete backing of the business.”
At the other end of the ‘so how was your day’ spectrum, Paddy Power CEO Patrick Kennedy just sold 71,567 shares of the Irish bookmaker at €68.20 apiece, earning Kennedy a pre-tax payday of €4.9m. Kennedy still holds close to 473k Paddy shares, the value of which has risen 47% in the past 12 months. Kennedy took over as Paddy CEO in 2006, the same year Hornby took the reins at HBOS.
Ladbrokes CEO Richard Glynn earned a £2.4m share bonus last month after Lads’ share price topped 200p and stayed there for over 30 days. The shares went on a tear following Lads inking its deal with Playtech last month, peaking at 243p. The stock closed Friday at 207.5p, down 15.5p on the day. Under the ‘Ladbrokes growth plan,’ introduced in 2010, if the share price hits 297p by 2015, Glynn will reap a whopping £12m bonus. Should we expect a flurry of merger rumors on New Year’s Eve, 2014?
