HBOS lent in retailing and property, often taking equity stakes as well as providing debt. This model was devised back in 2000 and developed by Mr Cummings.
It helped lift profits at the corporate division – the unit accounted for 40 per cent of HBOS profits in the first half of 2007 – but is now blamed for much of HBOS’s woes.
Providing debt and equity, such as in a 2001 hotel venture with Sir Rocco Forte, allowed the corporate lending team to establish a niche that set it apart from rivals.
It seems that there are no fancy derivatives or opaque assets. According to this, it is just good, old-fashion, bad lending.