UKFI backing as Lloyds prepares for stormy meeting

Published on Tuesday 2 June 2009 21:42

THE body charged with overseeing the government's stake in some of the UK's major banks yesterday threw its weight behind the board of Lloyds Banking Group ahead of its annual meeting later this week.

UK Financial Investments (UKFI), which looks after ministers' 43.4 per cent shareholding in Lloyds, said it would vote in favour of all the resolutions put to investors by the group at Friday's meeting in Glasgow.

That will include the re-appointment of chairman Sir Victor Blank and the group's remuneration report.

The move will be seen as the government reinforcing its support for the Lloyds board and its chief executive, Eric Daniels, ahead of what could be a stormy meeting, attended by angry small shareholders still smarting over the takeover of HBOS.

John Kingman, chief executive of UKFI, said: "UKFI has made it clear that we fully support the Lloyds board, strategy and executive team led by Eric Daniels."

Small shareholders are expected to vote against Blank's reappointment although he has said he will step down next year. They have also promised to vote against the remuneration report.

The UK Shareholders Association (UKSA) is also campaigning for the bank's 2.8 million small shareholders to vote against the re-election of Archie Kane, the board member responsible for Scotland, and Lord Leitch, the deputy chairman. Both were on the Lloyds board when it decided to take over HBOS.

Roger Lawson of UKSA said: "Sir Victor Blank will receive a significant protest vote even against him staying for a year. Some of the other directors will get votes against them also. I don't know why UKFI should support the same old formulas that have been used in the past."

Institutional investment advisory firm Pirc also said yesterday it had concerns over Blank's competence after the HBOS deal, which critics have claimed was pushed through without proper due diligence. It has advised voters to abstain from voting for the bank's remuneration report.

The Associational of British Insurers has issued a warning to members about the size of the share allocations and performance targets set for Lloyds directors.