Ensuring financial integrity throughout the biggest merger in the UK’s banking history

The Problem

In September 2008, the global financial crisis became a household reality in the UK with the near-collapse of HBOS, the UK’s largest mortgage and savings bank.  Too big to fail, the only option seemed to be takeover by another bank.  With the Prime Minister leading the way, LloydsTSB stepped in with an emergency takeover of HBOS – Lloyds Banking Group (LBG) became Britain’s biggest bank.

To secure the rescue and deliver value to taxpayers who were required to invest heavily in restructuring, the banks had to be integrated.  Nothing like this had been attempted before.  LBG would comprise three main divisions – Retail, Insurance and Wholesale.  Wholesale, dealing with all businesses and financial markets, faced arguably the most complex integration.  For Jonathan Britton, the Divisional Finance Director of Wholesale, this meant making sure that all the financial systems, processes, ledgers and reporting – the accounting bedrock that allows Wholesale to call itself a bank - remained intact before, during and after what would be close to three years of integration.

The DFD knew that he required pragmatic and grown-up expertise to assist in delivering this outcome.  Challenge Consulting worked hand-in-glove with the DFD’s Finance Integration Director Andrea Hodgson and the Wholesale Finance Leadership team to design, mobilise and execute the work that would merge the two finance operations and all its components.

Our Solution

LBG had a wealth of finance experts but limited experience of managing major change. This is what Challenge Consulting brought to the table. Working closely with Wholesale Finance senior management and the Integration Programme team, we successfully delivered the following objectives:

  • Set out the programme principles, priorities, deliverables and timescales.
  • Established a programme structure and method which put Wholesale Finance at the heart of all migration events (each moment of each system going live).
  • Ensured the programme was underpinned by consolidated programme and project plans (running to thousands of activities) and in doing so developed the first single view across Wholesale of the 100+ migration events which were going to hit the business across the project period.
  • Developed a cross-Business Unit view of the world where migrations knew no organisational boundaries.
  • Designed, built, implemented and made effective use of a systematic way of providing financial assurance to each migration event.
  • Transferred our skills to the integration programme team and Finance personnel across the Divisional functions; building their own capability to complete the programme.

Client's Benefits

The result? It worked; integration of the Wholesale banks is complete.  As a result of this project, Wholesale Finance ensured that the merging banks maintained financial integrity throughout the global financial crisis.

Client's Testimonial

“With such a unique and complex integration we absolutely made the right decision in engaging Challenge Consulting. Their sector knowledge and understanding of the scale of what was needed from the beginning were crucial factors in helping to shape the project and, ultimately, its success.”

Our Client’s Divisional Finance Director, Wholesale & Commercial