Former Bank of Scotland corporate chief hit by watchdog

Peter Cummings, the former head of Bank of Scotland’s corporate division, was today reported to have been issued with a “seven-figure” fine by the Financial Services Authority.

Last month, a damning report from the City watchdog said Bank of Scotland was guilty of “very serious financial misconduct” in the run-up to the collapse and £20 billion taxpayer-funded bailout of its parent company HBOS, which is now owned by Lloyds Banking Group.

The FSA said the division failed to “take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems” before HBOS’s demise in 2008.

According to a Sunday newspaper report, Cummings has been handed a “warning notice” and what is believed to be a seven-figure fine by the FSA.

Last month’s interim report condemned Bank of Scotland for pursuing “an aggressive growth strategy that focused on high-risk, sub-investment grade lending” which left it highly vulnerable in the economic downturn. However, the bank escaped a fine in order to protect the taxpayer.