Lloyds ‘on course’ despite HBOS report delay

CITY experts have brushed off a likely delay in the publication of the official report into the downfall of HBOS as a sideshow to parent Lloyds Banking Group’s continuing recovery.

Andrew Bailey is to deliver a report on HBOS. Picture: BBC

Analysts doubted yesterday that the delay – until at least the summer – would derail either restored dividends at Lloyds or the bank’s re-privatisation.

The bank got a £20 billion taxpayer bailout in 2008 after its “rescue” takeover of HBOS.

Simon Willis at broker Daniel Stewart said: “I think the City will be fairly relaxed at this. It will not make a huge difference in terms of the re-privatisation of Lloyds or resumption of dividends.

“I still think that a dividend will come with Lloyds’ full-year results early in 2014. I also don’t think the timetable for the further selling down of the government’s stake in the bank will be affected.”

Against the backdrop of returning profitability at Lloyds, the taxpayer stake in the bank was cut from 39 per cent to 33 per cent in the second half of 2013.

It is understood the main reason for the delay of the report is to give individuals criticised in it, such as former HBOS chairman Lord Stevenson, the right to make comments.

Andrew Bailey, chief executive of the Prudential Regulation Authority, which will co-author the HBOS report with the Financial Conduct Authority, said five months ago they were close to giving the draft report to such individuals. But it is thought this assessment proved too optimistic.