LYG Lloyds Banking Group Plc

By Ian Walker

LONDON--The U.K. Financial Conduct Authority and the Prudential Regulation Authority said Thursday they plan to start investigations into certain former senior managers of failed bank HBOS, to determine whether action should be taken, without naming them.

The decisions follows a report by Andrew Bailey, chief executive of the PRA, regarding the Financial Services Authority's enforcement actions following the failure of HBOS. This report recommended that the FCA and PRA should consider whether any former HBOS senior managers should be the subject of an enforcement investigation.

The regulators said they would continue to review material with a view to making further decisions regarding other former HBOS senior managers.

Last November the regulators said they were considering banning former officials of bailed out bank HBOS from working in the finance industry, as authorities continued to press for top executives to be held accountable for one of the most high-profile banking collapses from the financial crisis.

At the height of the crisis, HBOS was merged with Lloyds Banking Group PLC (LLOY.LN), following an ill-judged lending binge. The U.K. government subsequently invested 20.5 billion pounds ($29.03 billion) to rescue Lloyds.

Last November Mr. Bailey said "the board and senior executive management of HBOS failed to set an appropriate strategy, and also failed to challenge a flawed business model that placed inappropriate reliance on continuous growth without due regard to the risks involved."

He said back then that the PRA and the FCA will decide whether several former HBOS officials should be banned from the financial-services industry, a move recommended by Andrew Green, a lawyer who was commissioned to write an independent report on earlier regulatory investigations into HBOS's failure.

(Margot Patrick and Max Colchester contributed to this article.)

-Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749

(END) Dow Jones Newswires

January 28, 2016 05:50 ET (10:50 GMT)

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