Former HBOS chief James Crosby quits as Bridgepoint adviser

Banking standards commission named Crosby as architect of HBOS's downfall and called for him to be banned from City

The Guardian, Jennifer Rankin, Jill Treanor and Simon Bowers, Friday 5 April 2013

Sir James Crosby remains chairman of car loans group Moneybarn and a
 director of catering group Compass. Photograph: Anna Gowthorpe/PA

The fallout from the damning verdict on the management skills of the bankers at the top of HBOS began as Sir James Crosby, named as the architect of the bank's downfall, stood down as adviser to the private equity firm Bridgepoint.

The position of the 57-year-old on the board of the FTSE-100 contract catering company Compass was also being questioned as the City began digesting the parliamentary commission on banking standards' scathing analysis of the collapse of HBOS, the bank created in 2001 when Halifax and Bank of Scotland merged.

The commission slated Crosby, his successor Andy Hornby and the bank's former chairman Lord Stevenson for their "colossal failure" of management, which allowed the bank to rack up £47bn of losses. Those losses, said the report, would have brought down the bank even if the global financial crisis had not taken place. The commission called on the new City regulators to consider if the three should be banned from holding top positions in the financial services industry.

Within hours of the report being published, Bridgepoint, which has investments in the Pret A Manger sandwich chain, the fashion retailer Fat Face and the care provider Care UK, issued a brief statement to say Crosby had resigned.

Bridgepoint said: "Following a discussion with Sir James this morning, he has decided to resign from the advisory board." The role had involved four meetings a year for Crosby, as it considered new investments.

When Crosby left HBOS in 2006 his reputation was still intact and he joined the board of Compass in 2007, where he is the senior independent director, the most important non-executive role after the chairman. In that role he is the highest paid of the non-executives, on £125,000 a year. Crosby sits on most of the sub-committees – including the audit committee that looks after financial risks and whistleblowing – and is chairman of the remuneration committee.

At the annual meeting in February he was re-elected to the board with 99% endorsement from Compass investors, who he meets regularly in his role as head of the pay-setting committee. On Friday, though, there were expectations that he would gradually withdraw from the corporate scene. Compass declined to comment on Crosby's position.

He remains chairman of Money Barn, a car loans firm for those with a poor credit history, where he is also a shareholder.

The banking commission's report also criticised regulators failing to act on their concerns about the risks being taken by the bank in 2004.

But it said that: "The primary responsibility for the downfall of HBOS should rest with Sir James Crosby, architect of the strategy that set the course for disaster, with Andy Hornby, who proved unable or unwilling to change course, and Lord Stevenson, who presided over the bank's board from its birth to its death."

Andrew Tyrie, the Conservative MP who chairs the commission, refused to comment on calls for Crosby and Stevenson to be stripped of their titles. "That is not our job. We were not set up as a banking commission to strip people of their titles," he told the Today programme.

His call for the regulators to investigate whether the three men should be banned from working in the City may fall foul of a three-year rule governing investigations into wrongdoing.

Hornby's employer, Gala Coral, said the former HBOS chief executive had its "complete backing".

"Coral as a business is performing extremely well and that coincides with Andy's tenure as chief executive. He's doing a great job and we're delighted with the job he is doing. He has the complete backing of the business," the bookmaker group said.

Stevenson is a cross-bench peer who chaired HBOS from its creation in 2001, when Halifax merged with Bank of Scotland, and was also chairman of the publishers Pearson. He continues to be a director of Waterstones, where he was appointed to the board in 2011 after the bookseller was bought by Russian oligarch Alexander Mamut. Among his charitable work is chairing the Inter Mediate conflict-resolution charity, set up by former No 10 adviser Jonathan Powell. He is also a trustee of Glyndebourne and the Tate.

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Findings shame bankers who brought down HBOS