Former bank heads say HBOS can do without Lloyds takeover

THE former chief executives of Bank of Scotland and Royal Bank of Scotland say HBOS would be better off without the LLoyds TSB takeover.

Sir Peter Burt and Sir George Mathewson have written to HBOS calling for its chairman and chief executive to resign, saying HBOS and its shareholders would be better off if the bank were to remain independent, it was being reported today.

The letter-writers argue HBOS no longer needs to be rescued by Lloyds TSB, because the government and Bank of England have offered vital funds it requires.

The letter states: "It is our intention to create a detailed alternative plan that we believe will represent better value for both the HBOS shareholders and stakeholders by keeping HBOS as an independent bank.

"The Board can accept the Government's offer of financing, return HBOS to its core business using prudent underwriting practices for existing and new customers alike, establish relations with new investors globally and carry out a full strategic review of HBOS' assets and non-core businesses with fresh sets of eyes to maximise shareholder value."

Sir Peter Burt was chief executive of Bank of Scotland when it merged with Halifax to form HBOS, making his intervention difficult for the HBOS board to ignore.