Hubris: how HBOS wrecked the best bank in Britain – Ray Perman

I need to start this review with a disclaimer. I worked for Halifax plc from 1982 to 2001. I left because I didn’t like the way the organisation was moving from a bank to a retail “sell, sell, sell” culture. I had, and still have, a belief that banks should be slightly stodgy places where you should be asked some difficult questions before they agree to hand over large amounts of cash to people so they can buy houses they are going to struggle to afford.

Perman’s book is written from the perspective of Bank of Scotland rather than Halifax but since HBOS was the result of the merger between the two it was an interesting perspective.

The book tells the history of Bank of Scotland, the history of the merger, the boom and then the spectacular crash of 2008. It describes the relentless drive for sales and profit, the ventures into unknown territories and what happened when it ran out of money. Perman tries to explain the causes of the collapse of HBOS and the inherent weaknesses within the bank as well as the banking system.

I can’t say I enjoyed reading this book. It’s difficult to read about an organisation that I was once proud to work for becoming this appalling, insatiable monster. I also met, and at the time admired, James Crosby, when he was the director responsible for a division of Halifax I worked for. It saddens me to know what happened.

I’m pleased I did read the book though. It has given me a greater insight into the crash. It has helped me to understand how financial institutions can collapse like a house of cards. And it has made me more aware of the growing financial irresponsibility of Britain’s lenders again: if I took up the offer of every pre-authorised credit card I’ve been offered in the last month – including Halifax! –  I could probably buy a small house! It’s worrying.

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