John Mann Questions The Bankers - 2009

Mr Hornby. Are you personally culpable, or is it essentially bad luck that leads you to be facing the music for you industry today? In other words are there bankers out there who are thinking at the moment thinking, 'But there for there Grace of God go I?' I have already said on behalf of the board, that we accept full responsibility for, and have apologised for, the events that have taken place. Please do not in any way suggest that I am trying to avoid personal responsibility. I have been CEO for just over two years and it is clear that in that time, within eight to nine months of taking over as Chief Executive. I was then faced with the collapse of wholesale markets and followed by the events on Northern Rock. So it has been extremely, extremely stressful time and we have spent, with huge support from Dennis and the Board, we've spent that entire two years trying to make sure three things... #interrupts That's, I'm interested in the question of whether if events, if cards had gone slightly differently if there could have been others here rather than you facing the music? Or if you're personally culpable? I don't feel I am personally culpable. Thank you. Sir Fred Goodwin, how much worse could it have been at RBS if you hadn't been in charge? I fully accept my responsibility in the matter that we're talking about. I would imagine - to your question - there are others out there who think "But there for the Grace of God". It was a fact all the more numbing that through our rights issue, right through into the middle of September, we were moving forward positively. It was post-Lehmann's the collapse in confidence; the collapse in markets just came round and hit us. And we were caught at that point; it was very sharp, very sudden. See, I keep hearing about the requirement for brilliance. "We need to attract" - and people keep telling us, people keep telling me all the time, "We need to attract the most brilliant". Are there people who are more brilliant who could have done a brilliant who could have done a better job that you at RBS? There may well be, it would seem unreasonable for me to conclude that there weren't. But at the time, we felt that the rights issue had got the group back on track, it had dealt with the capital issue, we were moving forward. We had published our interim results. The world stopped, the funding markets came to a complete halt post-Lehmanns. You see, what it seems to a lot of people is when things go into a downward spiral, then this extra brilliance for which huge amounts of money has to be paid, have less relevance, therefore why has it got relevance in terms of how things go forward in terms of remuneration? I mean, let me be precise, is your pension linked to the share value of the bank? No, my share schemes are linked to the value of my bank, and my share holdings... But your pension? Is your pension? I mean many pensioners in this country are seeing the value of their pension go down because share values are going down. Is your pension going down because it’s linked to the value of your bank? No, because I'm in a defined benefit pension scheme. It's a good job though isn't it? Because the share value has gone down from 550 to 20 pence. Shouldn't it be? Shouldn't it be linked to the share value of the business that you ran? Wouldn't that be fare? Well no. Because pensions schemes are not generally allowed to invest in the company which is providing them. But as a principal wouldn't it be fare that your pension, which is quoted as being rather a high pension pot, over £8million I've seen quoted, wouldn't it be fair to other pensioners in Britain that your pension is linked to the share value of the bank that you ran? No, my pension is the same as everyone else in the bank in a defined benefit pensions scheme, it is the same as anyone else anywhere else who is in a defined benefit pension scheme. My linking to the, seeking not to be linked to the share performance of the bank, that was achieved through the shareholding, in which I've lost a lot of money, it was achieved through the medium and long term incentive plan of which I have lost a lot of money. The value of, between the end of '07 and now I would estimate I've lost somewhere in the region of over £5 million in the decline of value of shares that I have put in the company. I bought shares on the day we complete the Avian-Anglo transaction, more than a year's salary. So the decline in the share price of RBS has affected to me, I'm not complaining, but the value of my pension is germane to this conversation. No, but you don't appear to have done too badly out of the last eight years. I mean I would be tempted, to consider that your bank started in Tutor times, to ask what Henry VIII would have done to you, but instead I want to ask Mr Hornby, what's the average age of HBOS staff? Average Age? Yes. It would be in the low 40s. What's the average number of years service at HBOS? Well that's changing through the different divisions through the different mergers. But the average service length has been around 10 years. How much is JSA for an adult of say age 42? I'm sorry, I beg your pardon... How much is JSA for an adult of say age 42? //Jobs Seekers Allowance Job Seekers Allowance? I don't know the precise amount but it's a very low quantity of money. Because that would be the profile of the bank staff. I don't know you if you're going to be relying on £60.50 of Job Seekers Allowance I accept the fact that I am of similar age to the average age... What do you think the mood of the staff in bank is at the moment? Mr Mann, I have already said at the start I have apologised... I know, but what do you think of the mood at the moment? I think there is obviously considerable concern, they are going through a major merger, considerable concern about long term job security and - please let me finish - and I believe we have handled a very difficult situation to try and deliver the best result for 80,000 colleagues. What's a CAO2 form? I think you're referring, I've never used that precise form. A CAO2 form is a form that your bank sent me in your last week in charge. It sent me it - I'm a customer of 40 years, it sent me it, change of address, but I've not changed my address. It then sent me a bank account of a Mr and Mrs John Mann, but it wasn't my bank account, it was somebody else's bank account. I put it to you that there has been a bit of a meltdown in terms of the moral of the staff //I apologise for that mistake Mr Mann Isn't it true that in yesterday, in an internal staff review, that over half the staff, speaking to their own management said they were de-motivated and 82 per cent of the staff said that they were worried for their jobs? Mr Mann, it would be extraordinary, which is why we laid it out in our submission, if would be extraordinary if it had not caused demotivation, it has been be extremely difficult 12 months, please let me finish, they have gone through extreme concern, they have gone through a major merger, they are waiting to see how their job situation pans out over the next two years. All I would say is that I believe profoundly that the deal with Lloyds TSB will prove to be the best solution possible in very difficult circumstances. And I hope and I believe to be the case that that morale will improve over the cause of the next two years. But what staff tell me, I mean you told them in the two years you were in charge "we are a safe bank". I mean my mother told me forty years ago "Join the Halifax. It's a safe building society." That's what you said, you said repeatedly to staff over the last two years to staff "We are a safe bank". What staff are writing and saying now is, quote "I have felt so ashamed to work for the Halifax. It has now hit home that many of us will lose our jobs and the name of the Halifax, which me and you grew up with, with be erased from the high street." And many, many more. It's not surprising that they can't manage to get the bank accounts for someone like me right in that situation isn't it? I agree entirely that colleagues I think colleagues have been through a horribly stressful period. And I think the thing that really annoys them is, from the letters I've seen, you're still being paid aren't you? Is it £60,000 a month? Mr Mann, I have a short term consultancy arrangement with Lloyds TSB which can I just stress Lloyds TSB asked me to do. I have already agreed... £60,000 a month? That is correct. Which would be 36 of the low paid staff jobs in the bank. It's why the staff are angry at you I think. 36 of them could be paid each year out of that money. And the question I think they are asking I think, is considering the failure, why is failure being rewarded? Why are you still getting this money? Is it to cut their jobs? Can I just say three things. I have already agreed with Lloyds TSB that this arrangement will not last more than three months. If Lloyds TSB still want me to help them after a three month period I will certainly carry on to help them as required but do it for free, provide Eric Daniels all the assistance that he looks for. Secondly can I just please reiterate in terms of our impression of rewards for failure, what I outlined earlier, I have invested every single penny of my bonuses in my time in HBOS in shares, I have lost considerably more money over the last two years that I have been chief executive than I have earned, and I share all your concerns for staff morale, and I really do hope and believe that the future under Lloyds TSB will allow that morale to get back where it was 18 months ago, over time. Two final quick questions. One to you Mr Hornby, and one to you Sir Fred. Mr Hornby, in your final year one of your branches handed out a cabbage to staff who were not deemed to be performing well. Do you think that is super-epitaph on your time in charge? I think you're referring to an incident a couple of years ago, and I thought that was a very unfortunate incident that we followed up. Sir Fred, you're perhaps taking in the public eye, in the media, a major harder hitting than anyone on this, and this isn't to get at you, I'm interested in the culture. Is it that you're an aberration, is it that you're someone with a different moral compass in terms of what motivates you, or in your view, is your integrity and your ethics representative of your trade and profession of bankers? I think you know reflecting on everything that has happened there is cause to question some of the judgements that we've made and that's reflected in how things have turned out. I am not aware of a basis for questioning my integrity as a result of it all. I could not be more sorry for what has happened. I'm not going to go back over all of that again. I have invested an awful lot in RBS, and I don't mean financially, over a very long period of time and it's of great distress to me to see what particularly my colleagues are going through, I don't diminish customers and shareholders as well, but my colleagues.