MercoPress. South Atlantic News Agency

UK bank bosses told Parliament they are “profoundly sorry”

Former CEO of RBS Sir Fred Goodwin, apologised for “all of the distress that has been caused”

Former bosses at bailed-out banks Royal Bank of Scotland (RBS) and HBOS have said they are “profoundly sorry” and admitted they under-estimated the extent of the financial crisis.

Sir Fred Goodwin, former chief executive of RBS, which is now nearly 70% owned by taxpayers, apologised for "all of the distress that has been caused" in a bruising encounter with MPs on the Treasury Select Committee. But the ex-bank chiefs also claimed they had lost millions of pounds themselves and could not have foreseen the collapse in credit markets. Andy Hornby, former chief executive of HBOS, said he "never received a single penny" of his bonuses in cash during his tenure at the bank, while Sir Fred claimed to have lost more than £5 million in shares having invested his bonus in stock. But Sir Fred - known in the industry as "Fred the Shred" - and former RBS chairman Sir Tom McKillop faced accusations of "destroying a great British bank and costing the taxpayer £20 billion" thanks largely to their decision to buy Dutch rival ABN Amro at the peak of the market. They said the £50 billion RBS-led takeover in 2007 was "a bad mistake" and was now virtually worthless after the bank market collapse. The bosses presided over RBS and HBOS during the credit crunch that brought the banks to their knees and led to the industry's £37 billion taxpayer-funded rescue. HBOS was bought by rival Lloyds TSB and the new entity - Lloyds Banking Group - is 43% owned by the taxpayer. MPs on the cross party Commons Committee heard how Sir Fred earned £1.46 million last year and Mr Hornby was paid a salary of nearly £1 million. However, all four witnesses admitted they had no formal banking qualifications. Mr Hornby said that while he was "extremely sorry for the turn of events" that led to HBOS's rescue takeover by Lloyds TSB and Government bail out, he was "not personally culpable" for the crisis. Lord Stevenson, ex-HBOS chairman, added: "All of us have lost a great deal of money, including of course a great number of our colleagues, and we are very sorry for that. And I would also say we are sorry at the effect it has had on the communities we serve." Bank workers have staged a protest outside Westminster, calling on finance bosses to apologise for the "crisis" in the industry and pressing the case for bonuses to be paid to staff. Meanwhile workers from banks including HBOS and Lloyds travelled to London ahead of the Select Committee grilling of bank executives. The workers held up banners which read: "Remember us? You've put our jobs at risk." Rhianne Parsons, 31, who works for Lloyds TSB in Newport, South Wales, said most bank workers only received a few hundred pounds a year in bonuses which they relied on to top up their salary. "We don't get the huge bonuses earned by the chief executives who are responsible for the current crisis in banking. "They are the ones who have caused the problems yet they are still reaping the benefits of huge pay. We have to work really hard for our bonus but the bosses seem to get theirs whatever happens." Miss Parsons, whose partner lost his job at Lloyds TSB as part of cost-cutting, said the average bank worker was only paid between £11,000 and £12,000 a year and would be lucky to get a bonus of a few hundred pounds. Glenn Miller, who works for HBOS in Edinburgh, said: "Our message today is that these executives should apologise to bank workers. I hope today's committee hearing is the start of a process to clear up this mess and get rid of some of the bad practices in the industry." Mr Miller said workers had to achieve targets before they were paid their bonus, unlike executives. Bernadette Fisher, secretary of the Lloyds Group of the Unite union, which organised the protest, said: "There is a false impression that all bank workers earn huge amounts of money and get massive bonuses but that it just not correct."