Update on historic failures at HBOS Reading

Lloyds Banking Group
15 May 2023
15 min read

This page was last updated in May 2023 and will be amended when there are any new developments.


In January 2017, six people, two of them former employees of HBOS, were convicted and sentenced to up to 12 years in prison for criminal misconduct between 2003 and 2007 through the HBOS Impaired Assets Division, London and South East Region, based in Reading (‘HBOS Reading’). The convictions for conspiracy to corrupt, fraudulent trading and associated money laundering offences followed a police inquiry that began in mid-2010. 

Ongoing investigations into HBOS events prior to Lloyds acquisition 

The FCA and its predecessor, the FSA, have undertaken a number of investigations into the management of HBOS prior to its acquisition by the Group in 2009. The FSA issued a Final Notice and censure in March 2012 that concluded HBOS Corporate Banking Division had failed to take reasonable care to organise and control its affairs responsibly and effectively. In this notice the FSA highlighted the serious breakdown of controls in HBOS Reading.

Lloyds engagement following its acquisition of HBOS

HBOS Reading has received senior level attention from Lloyds Banking Group since HBOS was acquired in 2009. After initial exchanges with the regulator in the first half of 2009, a formal review into the events at HBOS Reading was instructed in conjunction with the FSA in September 2009. This review reported in March 2010 and the information that came to light during this review helped the police to commence their criminal investigation later in 2010 which ultimately led to the January 2017 convictions.

Reflections on the Group's handling of HBOS Reading

It is vital that Dame Linda Dobbs’ Review can conclude without the Group prejudicing the Review’s consideration of whether the issues relating to HBOS Impaired Assets office in Reading were investigated and appropriately reported to authorities at the time by Lloyds Banking Group. Nevertheless, while we await the full findings from Dame Linda’s review, we believe there are a number of key lessons which we are already seeking to reflect in our business approach. 

Next steps

The Board and Executive of Lloyds Banking Group recognise that the criminal activities that took place in HBOS Reading over a decade ago have not only had a damaging impact on the lives of those customers affected but have also cast a long shadow in undermining confidence and trust more widely. We are determined to learn from the failings made and take appropriate actions to change organisational behaviours in order to rebuild that trust.