Victor Blank
Encyclopedia
Sir Maurice Victor Blank, FRCOG(Hon)
(born 1942) is a prominent British businessman.
and then studied Modern History at St. Catherine's College, Oxford.
In 1969, aged 26, Blank was made the youngest Partner in the history of Clifford-Turner (now Clifford Chance
). At Clifford-Turner he specialised in corporate law
, and co-wrote Weinberg & Blank on Take-overs and Mergers, a textbook on the topic. He left Clifford Turner in 1981 to become Head of Corporate Finance at Charterhouse (now part of HSBC
), where he masterminded the buyout of Woolworth's
. From 1985-1996 he held the posts of Chairman and Chief Executive of Charterhouse. He was also a Director of the Royal Bank of Scotland
from 1985 to 1993.
After retiring from Charterhouse, Blank held a number of Chairmanships of FTSE 100 companies such as Trinity Mirror plc (1999–2006) and GUS plc (2000–2006). He was a member of the Financial Reporting Council
from 2002 to 2007, and a member of the Council of Oxford University from 2000 to 2007. He was appointed a senior adviser to US private equity
group TPG Capital in November 2007. As of 2007 Sir Victor was also Chairman of the Industrial and Development Advisory Board.
He was knighted in 1999 for services to the financial industry. In 2009, by contrast, he was dubbed 'Sir Victor Blank: The crony with a gift for disaster
' by Daily Mail columnist Peter Oborne
in May 2006.
stood out, its conservative policies having largely kept it out of the so-called "toxic securities" dealt in by other banks with riskier business models. However as more UK banks like Royal Bank of Scotland, teetered on the brink of collapse before being bailed out by the British Government, the Prime Minister Gordon Brown encouraged Lloyds TSB to merge with the another huge but struggling bank - Halifax Bank of Scotland or HBOS
.
Sir Victor was a key mover in the arrangement with Prime Minister Gordon Brown
to permit the merger to go ahead despite competition issues. At a dinner on 15 September both attended, an agreement was reached in principle, and the FSA began moves the following day.
On January 19, 2009 the merger between Lloyds TSB
and HBOS formally took place with the adoption of a new name for the combined group - "Lloyds Banking Group" with Sir Victor Blank as its chairman.
On February 12, 2009 the CEO of Lloyds group, Eric Daniels
, was questioned about the banking crisis during a session of the Treasury Select Committee of the House of Commons. One of the key issues concerned Lloyds takeover of HBOS
in 2008, and the amount of due diligence
carried out before the acquisition. He said that a company would always like to do more due dilligence on another company, but there are limits on how much is possible prior to an actual acquisition. Losses were a little higher than the £10 billion expected owing to write-off
s of property loans due to falling property prices and the lack of demand. Sir Victor confirmed in an August 2009 interview with the BBC's Robert Peston that losses had been "at the worst end of expectations", but what had surprised the Lloyds board was the speed at which the losses happened, due to the unexpectedly sharp contraction of the world economy in the last quarter of 2008 and the early part of 2009.
The bank has also been criticized for proceeding with bonus payments of £120 million in the current crisis whilst investors fumed at the massive losses they were suffering coupled with Sir Victor's airy dismissal of any prospect of dividend payments. Sir Victor had told Jeff Randall the payment of a dividend to shareholders would not have been - as he put it - "seemly" - and in any case a dividend blocker had been applied by the Government for 2009.
Contrary to much popular belief, the capital injection by the UK Government was not connected to the HBOS merger. Official documents released in relation to the merger confirmed that the FSA
would have required Lloyds TSB to have a bigger capital injection if it had not undertaken the merger and stayed standalone. That capital injection would still have led to the government's 'dividend blocker'.
After the October 2008 bailouts of RBS, HBOS and Lloyds TSB and Lloyds TSB's January 2009 merger with HBOS, the Government was holding a 43% stake in Lloyds Banking group, but then on March 6, 2009, after it became apparent that the global economy had contracted more than expected, the UK government announced their Asset Protection Scheme to underwrite future significant losses at Lloyds Banking Group and Royal Bank of Scotland. Detailed negotiations on the terms of entry to the scheme are expected to conclude in September 2009. It is currently not expected that Lloyds will not use the scheme to the extent originally envisaged, thus keeping the Government's holding to less than 50%.
On May 17, 2009 it was announced that Blank would stand down as chairman of Lloyds Banking Group
.
, Master of St. Catherine's College, Oxford, in response to a letter from the media lawyers Carter-Ruck
requesting a withdrawal by Ainsworth of an allegation, and an apology. No damages or costs were claimed. Ainsworth had made allegations against Blank in relation to discussions over the proportion of Oxford University's funding that should be passed on to colleges.
In the immediate aftermath of the Carter-Ruck letter, Ainsworth made a statement to the Heads of Colleges and Bursars who attended the meeting of the Conference of Colleges in which he withdrew his remarks and apologised. Some members of the University saw the use of letters from libel specialists as an inappropriate way of resolving differences between colleagues.
In the summer of 2007 Blank was at the centre of a disagreement between members of the Council of the University of Oxford
and members of the Congregation of the University, over the propriety of re-electing lay members of Council for extended periods. He subsequently announced that he would not be seeking re-election, a move arguably connected to a call by nearly 250 members of the University's Congregation for the re-election proposal to be debated.
Royal College of Obstetricians and Gynaecologists
The Royal College of Obstetricians and Gynaecologists is a professional association based in the UK. Its members, including people with and without medical degrees, work in the field of obstetrics and gynaecology, that is, pregnancy, childbirth, and female sexual and reproductive health...
(born 1942) is a prominent British businessman.
Background
Born in 1942, he was educated at Stockport Grammar SchoolStockport Grammar School
Stockport Grammar School is a co-educational independent school in Stockport, England, founded in 1487 by the 1482 Lord Mayor of London Sir Edmund Shaa.The school motto is "Vincit qui patitur" – He who endures, conquers....
and then studied Modern History at St. Catherine's College, Oxford.
In 1969, aged 26, Blank was made the youngest Partner in the history of Clifford-Turner (now Clifford Chance
Clifford Chance
Clifford Chance LLP is a global law firm headquartered in London, United Kingdom and a member of the 'Magic Circle' of leading UK law firms. It is one of the ten largest law firms in the world measured by both number of lawyers and revenue...
). At Clifford-Turner he specialised in corporate law
Corporate law
Corporate law is the study of how shareholders, directors, employees, creditors, and other stakeholders such as consumers, the community and the environment interact with one another. Corporate law is a part of a broader companies law...
, and co-wrote Weinberg & Blank on Take-overs and Mergers, a textbook on the topic. He left Clifford Turner in 1981 to become Head of Corporate Finance at Charterhouse (now part of HSBC
HSBC
HSBC Holdings plc is a global banking and financial services company headquartered in Canary Wharf, London, United Kingdom. it is the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine...
), where he masterminded the buyout of Woolworth's
Woolworths Group
Woolworths Group plc was a listed British company that owned the high-street retail chain, Woolworths, as well as other brands such as the entertainment distributor Entertainment UK and book and resource distributor Bertram Books...
. From 1985-1996 he held the posts of Chairman and Chief Executive of Charterhouse. He was also a Director of the Royal Bank of Scotland
Royal Bank of Scotland
The Royal Bank of Scotland Group is a British banking and insurance holding company in which the UK Government holds an 84% stake. This stake is held and managed through UK Financial Investments Limited, whose voting rights are limited to 75% in order for the bank to retain its listing on the...
from 1985 to 1993.
After retiring from Charterhouse, Blank held a number of Chairmanships of FTSE 100 companies such as Trinity Mirror plc (1999–2006) and GUS plc (2000–2006). He was a member of the Financial Reporting Council
Financial Reporting Council
The Financial Reporting Council is the UK's independent regulator responsible for promoting high quality corporate governance and reporting to foster investment.-Structure:...
from 2002 to 2007, and a member of the Council of Oxford University from 2000 to 2007. He was appointed a senior adviser to US private equity
Private equity
Private equity, in finance, is an asset class consisting of equity securities in operating companies that are not publicly traded on a stock exchange....
group TPG Capital in November 2007. As of 2007 Sir Victor was also Chairman of the Industrial and Development Advisory Board.
He was knighted in 1999 for services to the financial industry. In 2009, by contrast, he was dubbed 'Sir Victor Blank: The crony with a gift for disaster
Disaster
A disaster is a natural or man-made hazard that has come to fruition, resulting in an event of substantial extent causing significant physical damage or destruction, loss of life, or drastic change to the environment...
' by Daily Mail columnist Peter Oborne
Lloyds TSB and Lloyds Banking Group
Sir Victor became Chairman of Lloyds TSBLloyds Banking Group
Lloyds Banking Group plc is a major British financial institution, formed through the acquisition of HBOS by Lloyds TSB in 2009. As at February 2010, HM Treasury held a 41% shareholding through UK Financial Investments Limited . The Group headquarters is located at 25 Gresham Street in London, with...
in May 2006.
Credit crisis
When the credit crisis overwhelmed its first victims - like Northern Rock Bank - Lloyds TSBLloyds TSB
Lloyds TSB Bank Plc is a retail bank in the United Kingdom. It was established in 1995 by the merger of Lloyds Bank, established in Birmingham, England in 1765 and traditionally considered one of the Big Four clearing banks, with the TSB Group which traces its origins to 1810...
stood out, its conservative policies having largely kept it out of the so-called "toxic securities" dealt in by other banks with riskier business models. However as more UK banks like Royal Bank of Scotland, teetered on the brink of collapse before being bailed out by the British Government, the Prime Minister Gordon Brown encouraged Lloyds TSB to merge with the another huge but struggling bank - Halifax Bank of Scotland or HBOS
HBOS
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...
.
Sir Victor was a key mover in the arrangement with Prime Minister Gordon Brown
Gordon Brown
James Gordon Brown is a British Labour Party politician who was the Prime Minister of the United Kingdom and Leader of the Labour Party from 2007 until 2010. He previously served as Chancellor of the Exchequer in the Labour Government from 1997 to 2007...
to permit the merger to go ahead despite competition issues. At a dinner on 15 September both attended, an agreement was reached in principle, and the FSA began moves the following day.
On January 19, 2009 the merger between Lloyds TSB
Lloyds TSB
Lloyds TSB Bank Plc is a retail bank in the United Kingdom. It was established in 1995 by the merger of Lloyds Bank, established in Birmingham, England in 1765 and traditionally considered one of the Big Four clearing banks, with the TSB Group which traces its origins to 1810...
and HBOS formally took place with the adoption of a new name for the combined group - "Lloyds Banking Group" with Sir Victor Blank as its chairman.
On February 12, 2009 the CEO of Lloyds group, Eric Daniels
Eric Daniels
John Eric Daniels is an American banker and former chief executive officer of Lloyds Banking Group.-Early life:...
, was questioned about the banking crisis during a session of the Treasury Select Committee of the House of Commons. One of the key issues concerned Lloyds takeover of HBOS
HBOS
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...
in 2008, and the amount of due diligence
Due diligence
"Due diligence" is a term used for a number of concepts involving either an investigation of a business or person prior to signing a contract, or an act with a certain standard of care. It can be a legal obligation, but the term will more commonly apply to voluntary investigations...
carried out before the acquisition. He said that a company would always like to do more due dilligence on another company, but there are limits on how much is possible prior to an actual acquisition. Losses were a little higher than the £10 billion expected owing to write-off
Write-off
The term write-off describes a reduction in recognized value. In accounting terminology, it refers to recognition of the reduced or zero value of an asset. In income tax statements, it refers to a reduction of taxable income as recognition of certain expenses required to produce the income...
s of property loans due to falling property prices and the lack of demand. Sir Victor confirmed in an August 2009 interview with the BBC's Robert Peston that losses had been "at the worst end of expectations", but what had surprised the Lloyds board was the speed at which the losses happened, due to the unexpectedly sharp contraction of the world economy in the last quarter of 2008 and the early part of 2009.
The bank has also been criticized for proceeding with bonus payments of £120 million in the current crisis whilst investors fumed at the massive losses they were suffering coupled with Sir Victor's airy dismissal of any prospect of dividend payments. Sir Victor had told Jeff Randall the payment of a dividend to shareholders would not have been - as he put it - "seemly" - and in any case a dividend blocker had been applied by the Government for 2009.
Contrary to much popular belief, the capital injection by the UK Government was not connected to the HBOS merger. Official documents released in relation to the merger confirmed that the FSA
Financial Services Authority
The Financial Services Authority is a quasi-judicial body responsible for the regulation of the financial services industry in the United Kingdom. Its board is appointed by the Treasury and the organisation is structured as a company limited by guarantee and owned by the UK government. Its main...
would have required Lloyds TSB to have a bigger capital injection if it had not undertaken the merger and stayed standalone. That capital injection would still have led to the government's 'dividend blocker'.
After the October 2008 bailouts of RBS, HBOS and Lloyds TSB and Lloyds TSB's January 2009 merger with HBOS, the Government was holding a 43% stake in Lloyds Banking group, but then on March 6, 2009, after it became apparent that the global economy had contracted more than expected, the UK government announced their Asset Protection Scheme to underwrite future significant losses at Lloyds Banking Group and Royal Bank of Scotland. Detailed negotiations on the terms of entry to the scheme are expected to conclude in September 2009. It is currently not expected that Lloyds will not use the scheme to the extent originally envisaged, thus keeping the Government's holding to less than 50%.
On May 17, 2009 it was announced that Blank would stand down as chairman of Lloyds Banking Group
Lloyds Banking Group
Lloyds Banking Group plc is a major British financial institution, formed through the acquisition of HBOS by Lloyds TSB in 2009. As at February 2010, HM Treasury held a 41% shareholding through UK Financial Investments Limited . The Group headquarters is located at 25 Gresham Street in London, with...
.
Oxford controversy
In 2006 Blank received an apology from Roger AinsworthRoger Ainsworth
Roger Ainsworth is Master of St Catherine's College, Oxford and Professor of Engineering Science at the University of Oxford, England....
, Master of St. Catherine's College, Oxford, in response to a letter from the media lawyers Carter-Ruck
Carter-Ruck
Carter-Ruck is a British law firm founded by Peter Carter-Ruck.According to their website they specialise in libel, privacy, international law and commercial litigation....
requesting a withdrawal by Ainsworth of an allegation, and an apology. No damages or costs were claimed. Ainsworth had made allegations against Blank in relation to discussions over the proportion of Oxford University's funding that should be passed on to colleges.
In the immediate aftermath of the Carter-Ruck letter, Ainsworth made a statement to the Heads of Colleges and Bursars who attended the meeting of the Conference of Colleges in which he withdrew his remarks and apologised. Some members of the University saw the use of letters from libel specialists as an inappropriate way of resolving differences between colleagues.
In the summer of 2007 Blank was at the centre of a disagreement between members of the Council of the University of Oxford
University of Oxford
The University of Oxford is a university located in Oxford, United Kingdom. It is the second-oldest surviving university in the world and the oldest in the English-speaking world. Although its exact date of foundation is unclear, there is evidence of teaching as far back as 1096...
and members of the Congregation of the University, over the propriety of re-electing lay members of Council for extended periods. He subsequently announced that he would not be seeking re-election, a move arguably connected to a call by nearly 250 members of the University's Congregation for the re-election proposal to be debated.
Other interests
Blank is involved with the following not-for-profit organisations:- He is Chairman of the charity "Wellbeing of WomenWellbeing of WomenWellbeing of Women is a Charity based in the UK which raises money to invest in medical research and the development of specialist doctors and nurses working in the field of reproductive health. Every year the charity invests in research projects and allocates funds towards the training of doctors...
". - He is the Chairman of UJS Hillel.
- Chairman of the Royal College of Obstetricians and GynaecologistsRoyal College of Obstetricians and GynaecologistsThe Royal College of Obstetricians and Gynaecologists is a professional association based in the UK. Its members, including people with and without medical degrees, work in the field of obstetrics and gynaecology, that is, pregnancy, childbirth, and female sexual and reproductive health...
' health research charity, as well as an Honorary Fellow and a Patron of the Royal College. - Chairman of the Council of University College SchoolUniversity College SchoolUniversity College School, generally known as UCS, is an Independent school charity situated in Hampstead, north west London, England. The school was founded in 1830 by University College London and inherited many of that institution's progressive and secular views...
. - He is a Member of Council, advisor to the Environmental Change Unit and Chairman of the Development Programme Advisory Board of the University of OxfordUniversity of OxfordThe University of Oxford is a university located in Oxford, United Kingdom. It is the second-oldest surviving university in the world and the oldest in the English-speaking world. Although its exact date of foundation is unclear, there is evidence of teaching as far back as 1096...
. - He is an Honorary Fellow of St. Catherine's College, Oxford.
- A member of the Orchestra of the Age of Enlightenment.
- He is a Vice President of the Jewish Leadership CouncilJewish Leadership CouncilThe Jewish Leadership Council was formed in 2003, . The Council was founded by its first Chairman, then President of the Board of Deputies of British Jews, Henry Grunwald QC and an array of other senior UK Jewish leaders. The JLC brings together the most senior lay leaders of the major...
. - He is also a member of the CBIConfederation of British IndustryThe Confederation of British Industry is a British not for profit organisation incorporated by Royal charter which promotes the interests of its members, some 200,000 British businesses, a figure which includes some 80% of FTSE 100 companies and around 50% of FTSE 350 companies.-Role:The CBI works...
Boardroom Issues Group.
- "Every year his Oxford manor house hosts a cricket tournament attended by the great and the good to raise funds for the Wellbeing women's charity, which is close to his heart after the death of his mother, when he was 12, from ovarian cancer."
See also
- 2008 United Kingdom bank rescue package2008 United Kingdom bank rescue packageA bank rescue package totalling some £500 billion was announced by the British government on 8 October 2008, as a response to the ongoing global financial crisis. After two unsteady weeks at the end of September, the first week of October had seen major falls in the stock market and severe worries...
- 2009 United Kingdom bank rescue package2009 United Kingdom bank rescue packageA second bank rescue package totalling at least £50 billion was announced by the British government on 19 January 2009, as a response to the ongoing global financial crisis. The package was designed to increase the amount of money that banks could lend to businesses and private individuals...
- Eric DanielsEric DanielsJohn Eric Daniels is an American banker and former chief executive officer of Lloyds Banking Group.-Early life:...
- UK Financial Investments LimitedUK Financial Investments LimitedUK Financial Investments Ltd is a company set up in November 2008 by the UK Government to manage its shareholding in banks subscribing to its recapitalisation fund. They include Lloyds Banking Group , Royal Bank of Scotland Group and Northern Rock...
- Lloyds TSBLloyds TSBLloyds TSB Bank Plc is a retail bank in the United Kingdom. It was established in 1995 by the merger of Lloyds Bank, established in Birmingham, England in 1765 and traditionally considered one of the Big Four clearing banks, with the TSB Group which traces its origins to 1810...