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PENPIX-Former UK bank chiefs face Treasury grilling

Published 02/09/2009, 07:01 PM
Updated 02/09/2009, 07:08 PM

LONDON, Feb 10 (Reuters) - The former chief executives and chairmen of Royal Bank of Scotland and HBOS will be quizzed by UK politicians on Tuesday to discuss where mistakes were made during the banking crisis.

Fred Goodwin, the former RBS chief executive, is likely to attract most attention for his role in the near-collapse of RBS.

His former chairman Tom McKillop and their former counterparts at HBOS -- Andy Hornby and Dennis Stevenson -- are also likely to endure a rough ride.

Here are details on the four people facing the panel and their main inquisitor:

FRED GOODWIN, FORMER CEO RBS

Goodwin was regarded as one of the world's top bankers and dealmakers after a string of acquisitions made his Edinburgh-based bank one of the world's biggest across Europe, the United States and Asia.

But his takeover of Dutch bank ABN AMRO in October 2007 proved a deal too far -- it was ill-timed, ramping up investment banking exposure and eroding capital just as the financial crisis took hold.

A massive rights issue was not enough to keep the bank going, and RBS needed 20 billion pounds ($29.75 billion) of government funds, giving the state a near 70 percent stake and forcing Goodwin's exit.

The blunt, steely Scot, 50, was the longest-serving boss of a UK bank after nine years at the helm.

Nicknamed "Fred the shred" after cutting jobs in his previous job, the former accountant's operational skills and integration of NatWest won plaudits. But his aggressive management style prompted criticism he was too dominant, and his dealmaking prompted accusations of megalomania.

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The electrician's son was born and raised in Paisley, near Glasgow, and has always been protective of his private life. A keen golfer and Formula One motor racing fan -- he was a regular on the F1 circuit and golf partners have included Jack Nicklaus and Jackie Stewart -- he was knighted in 2004 for services to banking.

Some Labour politicians have called for that honour to be stripped, as well as for him to repay a 2.9 million pounds cash bonus for 2007. Many expect Goodwin to re-emerge in the private equity business.

TOM McKILLOP, FORMER CHAIRMAN RBS McKillop, 65, arrived at RBS with a healthy reputation after heading drugs firm AstraZeneca, but he is regarded to have failed in his main task -- keeping Goodwin in check.

Another tough Scot, last April he denied the accusation, saying there were "no patsies" on the RBS board.

After initially blaming external factors for RBS's demise, McKillop told shareholders in November he was "profoundly sorry" for the bank's problems.

McKillop led AstraZeneca for seven years.

With a PhD in chemistry he joined ICI's corporate research laboratory in 1969, and stayed with its pharmaceuticals arm when it was demerged to become Zeneca, and headed the group after its merger with Astra.

ANDY HORNBY, FORMER CEO HBOS

One of the youngest CEOs of a FTSE 100 firm, Hornby was touted as a new banking star when he took over at HBOS in 2006, but his two years in charge became increasingly uncomfortable.

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He stepped down after Lloyds' acquisition of HBOS, but he is likely to have been ousted anyway after HBOS had to take the taxpayers' rescue funds.

The 41-year-old Oxford and Harvard MBA graduate's strength was as a retailer. Many of HBOS's problems, notably its over-reliance on wholesale funding, were in place when he took over from James Crosby, who is now advising the government on the mortgage market.

Expectations were high when Hornby brought in a retailer's pace and eye for detail when he joined Halifax as head of UK retail in 1999. He joined from food retailer Asda.

The sports enthusiast, who supports Bristol City Football Club, is likely to return to retail.

DENNIS STEVENSON, FORMER CHAIRMAN OF HBOS The son of an Edinburgh sheriff, Stevenson, 63, became HBOS chairman in 2001, after Halifax merged with Bank of Scotland.

After reading classics and economics at Cambridge, Stevenson began his career in management consultancy and later was named trustee of the Tate Gallery art museum, overseeing construction of the Tate Modern in London.

In 1997 he was appointed chairman of Pearson media group and was made a life peer in 1999.

Stevenson -- like Goodwin, McKillop and Hornby -- waived his contractual rights to a pay-off when he left.

JOHN McFALL, CHAIRMAN TREASURY SELECT COMMITTEE

McFall, 64, has chaired one of parliament's most influential committees since 2001 and has won a reputation as a no-nonsense interrogator.

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The former schoolteacher, who entered parliament in 1987, said in January that he would be stepping down from the committee at the next general election, which must be called by mid-2010 at the latest.

Under his chairmanship the panel has won a reputation for tough questioning and can claim some notable successes, including the award of compensation to split-capital trust investors and increasing the supply of fee-free cash machines in poorer areas.

When the Labour Party swept to power in 1997, McFall served as a government whip and junior minister in the Northern Ireland Office.

He holds degrees in chemistry, business administration and education and philosophy. ($1=.6722 Pound) (Compiled by Steve Slater, Frank Prenesti and Catherin Bosley; Editing by Hans Peters)

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