Further proof that former commercial property director for HBOS, Peter Cummings, was a bit too loose with his purse strings came last week as Kenmore Property Group went into administration, owing the bank, now part of Lloyds Banking Group, over £700 million.
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Although the property firm recorded a loss of £85.7 million in the year to June 2008, Mr Cummings still rubber stamped £875 million of refinancing for Kenmore – just a couple of weeks before he stood down from his post.
Kenmore Property Group, which is owed by John Kennedy, one of the richest men in Scotland, was put into administration as plunging home sales made it incapable of meeting its existing business obligations.
However, Lloyds Banking Group has agreed to provide emergency funding in order for the company to remain trading “as a going concern”, despite 21 of its subsidiaries being liquidated, and another two put into receivership.
Mr Cummings joined HBOS at the age of eighteen, working his way up to head of its corporate lending division and earning £2.6 million in 2008, more than former chief executive Andy Hornby.
However, he left the board and the bank with a tarnished reputation when the merger with Lloyds TSB was finalised, having remained bullish in the face of tumbling commercial property values and failing to understand the severity of the sector’s crisis.
He infamously said in February 2008: “Some people look as though they are losing their nerve - beginning to panic, even - in today's testing real estate environment. Not us.”
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