Halifax Bank of Scotland

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HBOS plc is a banking and insurance company in the United Kingdom, a wholly owned subsidiary of the Lloyds Banking Group having been taken over in January 2009. It is the holding company for Bank of Scotland plc, which operates the Bank of Scotland and Halifax brands in the UK, as well as HBOS Australia and HBOS Insurance & Investment Group Limited, the group's insurance division.

Formed originally from a merger of the Halifax Building Society and Bank of Scotland in 2001, and headquartered in Edinburgh, with 22 million customers and assets of over £540 billion in 2007,[1] HBOS at that point ranked third in the list of Scotland's top 500 companies and was the seventh largest bank in Europe.[2] The company employed around 72,000 staff globally and reported a net income in 2006 of £3939 million.[3]

HBOS is one of the largest commercial sponsors of sport and the arts in Scotland, to the tune of £19.5 million in 2003, and is best known for its sponsorship of the Scottish Premier League. However this was due to expire at the end of the current 9-year deal in 2007.[4]


There are four main subsidiaries at HBOS: Halifax Plc, The Governor & Company of the Bank of Scotland, HBOS Australia and HBOS Insurance & Investment Group. Australia features highly in the companies expansion plans [1]. HBOS lists 594 active companies that they retain a business interests in,[5] some of the more well known subsidiaries include: Bank of Western Australia Ltd, BankWest, Capital Finance and St Andrews Insurance; and UK companies Clerical Medical, Birmingham Midshires, Capital Bank, Godfrey Davis, Lex Vehicle Leasing, Hill Hire Plc, Sainsbury's Bank, BM Solutions; The Mortgage Business; Rightmove; First Alternative; Esure; Employee Share Services; Mentor Professional Services; St Andrews Group, St James's Place Bank, St James's Place Group (formerly known as St James's Place Capital Plc), and of course Banco Halifax Hispania, Bank of Scotland (Ireland) and Bank of Scotland (The Netherlands).

HBOS investments

Unlike the Royal Bank of Scotland, HBoS is less involved in overseas project finance. Though the expansion of HBOS Australia appears to be a definate corporate strategy of late. Since 2002 the Bank of Scotland consolidated its position as a leader in PPP/PFI type finance, bringing the first such deal to France as a partner in the construction of a new motorway.[6] In 2004 it won a major share in an Australian PFI initiative, another road-building project.[7] In 2004 the Bank of Scotland part-funded a £35m PPP/PFI deal with the City of Edinburgh Council for the Edinburgh Schools Partnership for the design, construction, financing and operation of 4 schools.[8]

In Glasgow the 3ED consortium, involving the Miller Group construction company, the Halifax bank (now HBoS) and Hewlett Packard computers, will organise construction and retain operational control of the school buildings for the next 29 years. The city council will rent the buildings from 3ED for an annual fee of £40.5 million, an arrangement that is guaranteed to continue for the next 30 years, allowing 3ED to re-coup £1.2bn. This move had been prepared for by the closure of 9 secondary schools in Glasgow, with a population of 30,000 pupils.

HBOS finances Wood McKenzie, a Scottish oil and gas consultancy firm also involved in Caspian oil and gas.[9]

In 2002 HBOS financed Philip Green's take-over of Arcadia, the retail group which owns high street brands such as Topshop, Miss Selfridge, Dorothy Perkins and Burtons.[10] No Sweat UK has reported union repression and low wages in this group. Factories in London's Whitechapel producing goods for Arcadia were found to be paying substantially under the minimum wage, and other UK suppliers claimed that the company paid so little that they could not provide better wages or working conditions. In Bombay in 2002 there were reports of intimidation of union members, including harassment, physical assault and reduced work.[11] In 2004, Philip Green wrote himself a cheque for 3460 million as a result of profits from Arcadia,[12] and the remainder went to HBoS, which holds the other 8% of the company.[13]

HBOS and 'ethical investment'

In 2002 HBoS launched asset manager, Insight Investment, which later that year started up an 'Investor Responsibility Service' which aimed to make it easier for 'institutional investors to demonstrate a commitment to addressing corporate responsibility issues, without compromising their financial objectives.'[14] Rather than limiting the companies in which it invest, Insight Investors favours the 'constructive engagement' approach, hosting conferences and organising meetings. Thus, rather than withdrawing investment from environmentally destructive energy and mining companies,it invites senior managers to seminar about, for example, biodiversity and management of fragile ecosystems.[15] The major companies invested in include: BAE Systems, BP, British Airways, Cairn Energy, Cadbury Schweppes, Diageo, Easyjet, GlaxoSmithKline, J Sainsbury's, Marks and Spencer's, Safeway, Scottish and Southern Energy, ScottishPower, Shell, Tesco, Tullow Oil and Unilever.[16] The actual benefit of such investment in changing companies' ethical behaviour has yet to be demonstrated.

Like many other high profile corporations HBOS has increasingly identified the potential of the 'green movement', as a a key source of growth for their business. In a statement from HBOS, they announced,

"Green finance is clearly an area where lenders can play an important part. We plan to launch a green mortgage next year".[17]

HBOS failing its poorer customers

The Guardian reported that in November 2004, HBoS began charging up to £1.75 for cash withdrawals from its cash machines. This will hit lower income customers hardest especially those who have to use cash machines to withdraw benefits and pensions. With the closure of so many post offices in recent years, withdrawing benefits from cash machines is becoming more and more common.[18]

HBOS and accounting mismanagement

HBoS was fined £1.25 million in January 2004 for failing to protect against money laundering - they conducted an internal survey in 2002 and could not find records of necessary customer identification documents in 55% of cases.[19] This is an astonishing statistic, suggesting that although the bank should have scrutinised all their customers' accounts when money laundering legislation came into force, it did not do so.


The Chairman of the Board is Dennis Stevenson. In addition there are five executive directors and eight non-executive directors, including Sir Ronald Garrick who is the deputy chairman.

Current Executive Directors

Current Non-Executive Directors

Past Board Members

Executive Committee

The HBOS Executive Committee is the senior executive team of the HBOS Group.

The six executive directors along with Harry Baines and Dan Watkins make up the Executive Committee.

Spinners and lobbyists

HBOS relies less on external public affairs/lobbying organisations than many of its peers, however this may be due in part to the award winning [20] in-house team of specialists they have brought in to lobby and campiagn on the corporations behalf.

Large and Highprofile Shareholders

Former employee Stewart Stevenson, currently Member of Scottish Parliament for Banff and Buchan has declared an interest in HBoS on the Register of Member's Interests - retaining HBoS ordinary stock of nominal value £10,250 (market value, approximately £410,000). He has has other declared shareholdings, in Scottish Power and Scottish & Southern Electricity[21].

Other substantial shareholdings are held by Legal & General Group Plc 4.02%, Barclays 3.97% and Capital Group Companies Inc 3.79%.[22]


In 2006 the Christmas savings hamper company Farepak, owned by European Home retail collapsed because it could no longer meet its commitments to make deliveries to its customers. Halifax Bank of Scotland had provided an overdraft facility to European Home Retail, and the decision not to extend the overdraft eventually led to administrators being called in. The Bank had come into criticism after more than 150,000 customers, mainly on low incomes, lost an average of £400 each, although some lost closer to £2,000 because it had rejected a number of options that may have enabled Farepak to continue trading.[23]

After receiving much negative media attention, HBOS responded to the criticism over its role in the Farepak collapse by giving £2m to the Family Fund, a Yorkshire-based charity administering the Farepak Response Fund, set up to help victims of collapsed firm.[24]

Though in December 2006 HBOS launched an attack on customers of the failed Christmas club, claiming that a lack of gratitude may have deterred donations to a charity fund.[25]

In a recent, but equally controversial move, HBoS have announced their intention to set up their own Christmas Savings Account aimed at low income families. A deposit of £5 is required to open the new account with a minimum of £5 a month thereafter, to a maximum of £100 a month. They will be able to take their savings in cash or vouchers.[26]

Revolving Door

  • Sir James Crosby, Deputy Chairman of the Financial Services Authority from 2004-2009, was CEO of Halifax plc from 1999 to 2001 and HBOS plc from 2001 to 2006.[27]
  • Peter Gummer, Lord Chadlington of Dean, was a Non-executive director of Halifax Building Society and then Halifax plc from 1994 to 2001.[28]
  • Mike Robinson, Chief Executive of the United Kingdom Hydrographic Office, the Government Trading Fund and part of the Ministry of Defence, was Chief Executive of HBOS European Financial Services plc from 2005 to 2006.[29]
  • U.K. Life Peer George Simpson, Lord Simpson of Dunkeld, was a Non-Executive Director of Bank of Scotland from 2000 to 2001.[30]
  • Bank of Scotland employee Robert Smeaton was seconded to the Department for Trade and Industry from 1996 to 2001 to work as an Export Promoter.[31]
  • U.K. Life Peer Dennis Stevenson, Lord Stevenson of Coddenham, was a Non-executive director of Halifax plc from 1999 and Chairmain of HBOS Plc from 2001.[32]


HBOS is a member and funder of a number of external organisations and bodies. The charitable work of HBOS is carried out predominately through the HBOS Foundation.[33]


HBOS is affiliated and involved with a number of other organisations including Forum for the Future, the Hansard Society and Scottish Financial Enterprise (sometimes referred to as the Scottish Financial Network). HBOS are members of the European Sponsorship Association.

Lobbying firms

Former lobbying firms

Revolving Door.jpg This article is part of the Revolving Door project of Spinwatch.



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  4. BBC News Sport, "Bank to end its SPL sponsorship," 22 March 2006, accessed 13 January 2011.
  5. Fraser, Ian, "HBOS cultivates Down Under for growth; Having scrapped plans to," 28 November 2004, Sunday Herald, accessed 13 January 2011.
  6. HBOS, "Bank of Scotland Exports UK Lead In PFI/PPP to Europe with Participation in Ground-Breaking €915 Million French Motorway Project," 05 July 2002, Web Archive 27 July 2003, accessed 13 January 2011.
  7. Dey, Iain, "HBOS drives ahead with Australian PFI," 17 October 2004, Scotsman, accessed 13 January 2011.
  8. Scottish Business Insider.
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  16. Evo Energy, "Brown Goes Green to Steal Tory Thunder," 26 March 2007, accessed 13 January 2011.
  17. HBOS plc, Consultation document to accompany Insight’s presentation to the World Parks Congress, 13 September 2003, accessed 13 January 2011.
  18. Insight Investment, Insight's engagement and voting 2003, accessed 16 March 2005.
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  20. Tomlinson, Heather, "HBOS flouted dirty money rules," 16 January 2004, The Guardian, accessed 13 January 2011.
  21. CIPR, Chartered Institute of Public Relations 2005/06 PRide Awards Winners, accessed 12 April 2007.
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  24. BBC News, "Farepak boss 'sorry' for collapse," 13 November 2006, accessed 13 January 2011.
  25. Levene, Tony, "HBOS gives to Farepak charity after criticism, 09 November 2006, accessed 13 January 2011.
  26. Womack, Stephen, "Farepak bank: be far more grateful," Financial Mail on Sunday, 17 December 2006.
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  34. Register Entry for 1 September 2008 to 30 November 2008 APPC, accessed 28 January 2015