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‘Sales culture critic warned system was out of balance’

Former HBOS bosses have rejected claims by a former risk director that a sales culture led to the firm’s problems.

At a Treasury select committee hearing on Tuesday, ex-HBOS chairman Lord Stevenson and former chief executive Andy Hornby were questioned over the HBOS relationship between sales and risk.

MPs quoted evidence from former HBOS head of group regulatory risk Paul Moore, who accused the bank’s board of ignoring his concerns about the speed at which its balance sheet grew using wholesale funding.

Moore was quoted as having said: “I told HBOS their sales culture was significantly out of balance with their systems and their controls. I told the board they ought to slow down but was prevented in having this properly minuted.”

Moore won an industrial tribunal case against HBOS in 2005 after accusations of threatening behaviour, was paid undisclosed damages and was given a gagging order, according to evidence given to the committee.

His role was taken over by Jo Dawson, who, Hornby admitted, did not have any formal risk qualifications.

Labour MP George Mudie said: “It seems that you did not want anyone being blunt about the risks you were running.”

Stevenson said: “The fundamental mistake was failure to predict the wholesale risk. Moore’s accusations were nothing to do with this, the issue which has caused HBOS problems is the market collapse.”


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Hope and experience

If I told you I had just read an article about the optimism and anticipation being savoured by Henderson at the prospect of the company becoming a top-five UK fund manager in the wake of its latest acquisition, you might well snort at my already being a few weeks behind the times.

In Focus Ebola cover - thumbnail

White paper — In Focus: Ebola Virus Disease

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