HBOS bosses make £1.7 million from FTSE bounce back
26 March 2008 / by Joy Tibbs
A number of HBOS executives have helped the bank recover from the false and "malicious" rumours spread by rogue traders last week by buying company stock on a large scale.
Yesterday saw the largest rise in HBOS share prices since Halifax and the Bank of Scotland merged to form the banking giant in 2001.
According to reports, approximately 250 HBOS directors and senior staff bought more than £6 million worth of shares over the Easter weekend, taking advantage of a price dip after reports that the bank was in trouble broke.
Share prices dropped by nearly 20 per cent at the peak of the mini crisis last week, when reports emerged that HBOS had requested emergency funding from the Bank of England.
However, shares in the Edinburgh-based bank made a dramatic recovery during yesterday's trading, rising almost 15 per cent to 544.5 pence. Investor confidence appears to have returned after the rumours were vehemently quashed by the company last week.
The stock gamble led by chief executive Andy Hornby also appears to have helped boost consumer confidence as well as presenting executives with a £1.7 million return on their investment.
And HBOS was not the only FTSE 100 company to register significant price increases yesterday. While the FTSE rose 3.6 per cent overall, the banking sector witnessed an impressive six per cent rise. Lloyds, Barclays and Bank of Scotland shares all rose by between six and 10 per cent.
However, credit crunch fears continue to hang in the air as banks continue to hold onto money recently pumped into the market by central banks rather than increasing lending between financial institutions. Borrowing costs are still rising, despite the efforts of US, Eurozone and UK central banks to increase liquidity in the global money markets.
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