HBOS chairman apologises to shareholders

The chairman of HBOS apologised today for the ailing bank's plight as shareholders gathered to vote on the firm's £11.5 billion taxpayer bail-out and rescue takeover by rival Lloyds TSB.

Dennis Stevenson said the board was sorry about the financial impact of the crisis on investors and said he was "neither happy nor proud" as chairman.

He told the meeting in Birmingham - delayed for half an hour by a serious accident on the M6 - that the world was living through "the most pronounced financial crisis since the Great Depression".

The merger with Lloyds TSB will create a superbank with 145,000 staff and 3,000 branches but unions, fearful of thousands of job losses, protested outside the meeting today.

HBOS, which posted another gloomy trading update today, was facing conditions "frankly more difficult by the day", Mr Stevenson said.

The Lloyds takeover has been opposed by some Scottish businessmen, but the board considered all alternatives, the chairman added.

"I cannot say too strongly that your board looked at every possible solution... we do not cede our independence lightly."

The combined bank is likely to be 43.5% owned by the taxpayer following capital raising by HBOS and Lloyds TSB - leaving existing HBOS shareholders with just 20% of the new bank.

But Mr Stevenson said of the public banking rescue: "Overall, I applaud the intervention of the UK Government... it was the right thing to have done."