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Blank space: the inside story on Lloyds Bank

Ivan Fallon, former deputy editor of the Sunday Times, has written a book on the inside story of how Lloyds Bank fell from being a bastion of stability in the UK banking sector to needing a capital injection and bailout by HM government.


The answer of course is HBOS. The history written to date tells us that bankrupt HBOS was thrust into the grasping hands of Lloyds’ chairman Victor Blank over cocktails with then UK prime minister Gordon Brown. Fallon, who spoke to all the key players in the saga, tells a different version of events in Black Horse Ride. A Lloyds veteran tells Euromoney that this account is “the closest version yet to what actually happened”. Fallon’s book, to some extent, seeks to repair some of the damage to the reputations of Blank and the Lloyds CEO at the time, Eric Daniels.

It’s a cracking read, and Fallon does not pull his punches.

After initially jumping on the deal, Lloyds’ enthusiasm started to wane. The UK authorities wouldn’t let Lloyds pull back. As Fallon says: “The government wanted the deal so badly…it was prepared to make promises which it seemed to have forgotten about by Tuesday. Six months later those same treasury officials were engineering the departure of Lloyds’ chairman.”


Will the book be enough to rehabilitate Blank among Lloyds’ employees and shareholders? We’re not sure. On a recent visit to the executive floors of Lloyds’ London HQ, Euromoney noticed that, among the portraits of former chairmen as you leave the lift, Blank’s was missing. It had been replaced by that of recently retired successor Win Bischoff. Blank’s, it turned out, was round two corners and opposite an executive dining room.

Blank and Daniels saw HBOS as a once-in-a-lifetime chance to gain unbeatable market share in the UK. Was £60 billion-plus in write-offs, massive funding challenges, huge integration of systems and processes, 50,000 job reductions and the sale of TSB following EU intervention a price worth paying?

Maybe. Lloyds is the best bank in the UK for the second year running in Euromoney’s awards for excellence. Then again, it also wins the global award for best bank transformation – which took four years of hard labour under current CEO António Horta-Osório, whether he was sorting out the mess created by Brown, Blank, the UK treasury or a combination of all three.

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