Lloyds Banking Group appoints Dame Linda Dobbs to lead review of HBOS scandal with compensation offers starting next month

 
Rebecca Smith
Two ex-HBOS bankers were among six people jailed back in February for their roles in a ruse to drive small businesses into the ground for personal gain
Two ex-HBOS bankers were among six people jailed back in February for their roles in a ruse to drive small businesses into the ground for personal gain (Source: Getty)

Lloyds Banking Group has appointed Dame Linda Dobbs to carry out an independent review into the HBOS scandal and has announced it expects to start making compensation pay-out offers to victims from late May.

Dobbs, a former High Court judge, will assess whether the situation at HBOS was effectively investigated and reported properly at the time by Lloyds, following its takeover of the bank.

The bank set aside around £100m earlier this month to compensate customers, who suffered due to an HBOS fraud which ran up losses of £250m for the now collapsed bank.

Read more: City watchdog chair faces calls to resign after FCA launches HBOS probe

Lloyds said Dobbs had been selected for "her considerable experience of working on fraud cases", as well as chairing inquiries.

The independent assessment will cover the period following HBOS's acquisition by Lloyds back in January 2009, through to the conclusion of the criminal trial at the beginning of the year.

Once the review has been completed, its findings will be shared with the Financial Conduct Authority (FCA).

The FCA recently said it was reopening an investigation into the fraud, which took place in HBOS's Reading-based impaired assets team. Its assessment had been on hold while the criminal trial took place, with the FCA now focusing on the "extent and nature of the knowledge of these matters" and the bank's communications with the financial regulator at the time.

Lloyds also said today it expects to start making the payouts to the victims involved "from late May onwards", though added the length of time required to assess each customer case will depend upon the individual situation.

In February six people, including two former HBOS bankers, were jailed for 50 years between them for their roles in a scheme which ran the business into the ground for their own personal gain.

Read more: Lloyds has set aside £100m to help HBOS fraud victims

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