EXCLUSIVE: HBOS seeks to ease staff concerns

The fall out following this weeks five shock resignations at HBOS intensified last night as the UKs largest mortgage lender sought to ease staff concerns.

Nine senior staff across two HBOS brands have walked out in the last three weeks.

But within 36 hours of Mondays five latest resignations, Birmingham Midshires managing director Nigel Stockton had emailed staff a message described to Mortgage Strategy Online as a rallying cry to the troops in which he urged staff not to be concerned.

In the leaked email he detailed replacements for head of HBOS specialist lending Michel Bolton, Halifax Intermediaries sales director Alan Cleary, BM Solutions operations director John Nixon and head of underwriting Rob Williams and head of support Mark Smith urging all staff that it was business as usual.

The five aforementioned HBOS staff resigned on Monday this week to join The Oakwood Group, a private equity company fronted by Future Mortgages founder Mike Culhane.

The resignations have been described as a major blow to HBOS, which just weeks earlier had seen senior management staff at its subsidiary The Mortgage Business, including managing director Bill Dudgeon, also quit, that time to join Deutsche Bank with a view to launching a rival specialist lending arm in the New Year.

Given the high profile and structured resignation of the now “famous five” it is widely believed that Bolton and those that followed him will also launch a new specialist lender one that will compete directly with BM Solutions by March next year.

Sources close to The Oakwood Group say that there is not a possibility that the so-called famous five will launch to the market in any other way but to create and launch a new lender themselves. That immediately rules out the possibility that the “five” could seek to enter the market by buying an existing mortgage intermediary and quickly converting it into a lender.

The Oakwood Groups Mike Culhane has a glittering track record in the specialist lending sector. Not only did he single handedly conceive and create the original management team for Future Mortgages one that included the enigmatic Mark Abbott and sales maestro Brian Pitt who have both since gone on to launch boutique lender Beacon Homeloans he also helped manage to secure Citi Group as an eventual buyer for Future, a US institution that paid close to 50 million (UK Sterling) to take the company forward to what it is today.

Culhane was also the mastermind behind Mortgages PLCs sale to Merrill Lynch, helping to broker a deal that saw the sub-prime lender sell for much more than some pundits had previously thought.

The direct impact of HBOSs nine most recent departures remains to be seen. But insiders say the last 21 days will have hit Birmingham Midshires MD Nigel Stockton hard.

A recent entrant to the mortgage market previously he was running Capital Banks personal loans business he had been charged with, amongst others, overseeing the development of both the BM Solutions and The Mortgage Business brands in the specialist lending arena.

But in the last three weeks he has witnessed at least nine senior members of staff walk out from both BMS and TMB and has had to oversee what some have called a hasty internal re-deployment of staff to fill vacant positions. Only yesterday Halifax stalwart Phil Jenks was promoted to fill the gap vacated by Bolton, taking on the position of head of HBOS Specialist Lending.

And sources say other redeployments following the companys last restructure after Michael Bolton and Alan Cleary were promoted out of BM Solutions have been difficult to reconcile amongst most staff members.

Those most aggrieved include senior staff in the sales forces and business development manager teams at both The Mortgage Business and BM Solutions, as well as some processing staff based in Cardiff.

One high profile member of the new sales force says: You have to question what is happening within BM Solutions and The Mortgage Business at the moment – the words headless and chicken do spring to mind. Nigel really needs to takes stock of the situation or its going to get out of control.

Commenting on the most recent changes, one high profile lender says: From the outside looking in it would seem that Michael Boltons departure from HBOS was not unexpected indeed it may well have been a good plan that backfired.

What was unexpected, however, was that he would take a team with him. Without a doubt various senior HBOS board directors will be feeling somewhat aggrieved this morning at the way this has panned out. Quite what James Crosby will make of it all is anyones guess quite conceivably hes lost what was the best team in the entire specialist market. But then does he even know what that is?”