Perks: Disgraced banker Peter Cummings has left HBOS with an estimated £10m pension pot



The disgraced banker who helped bring Halifax Bank of Scotland to its knees was given a £600,000 pay-off and is likely to receive a pension of more than £400,000 a year.

Peter Cummings, who masterminded many of the stricken bank's high-profile deals, has left with a pension pot estimated at £10million-plus.

The one-time tea boy was sacked last month following the merger with profitable Lloyds TSB but details of his extraordinary golden goodbye emerged only last night.

Cummings, 53, was in charge of the ill-fated HBOS corporate lending division which is now being blamed for piling up a mountain of toxic debts.



His reckless practices have returned to haunt HBOS's new owner Lloyds. Losses on its corporate loans rose tenfold to £6.7billion after a raft of its deals with property and construction companies blew up.

The latest 'fat cat failure' row echoes the furore generated by former RBS chief executive Sir Fred Goodwin - who is insisting that he will take a £693,000-a-year pension deal after his exit in October.

Last night, government officials asked Lloyds Banking Group - created as a result of a rushed merger between Lloyds TSB and HBOS last autumn and 43 per cent state owned - to review pay-offs to Cummings and other executives.

A spokesman for UK Financial Investments - which manages the taxpayer stakes in part-nationalised banks - said Lloyds had agreed to ensure ex-directors had got 'no more than was legally necessary'.

Beleaguered HBOS announced catastrophic annual losses of £10.8billion yesterday as its new owner Lloyds warned it would mean a slide into the red for the combined organisation this year.

Catastrophic: HBOS has just announced annual losses of £10.8billion

The news saw shares in Lloyds Banking Group close down 22 per cent in a day, at 58.3p.



The losses will fuel growing calls for an inquiry into the 'shotgun marriage' between the once-strong Lloyds TSB and the ailing HBOS.

Lloyds chairman Sir Victor Blank has revealed that the Prime Minister offered to suspend competition law to allow the takeover during talks at a City cocktail party.



But yesterday Mr Brown attempted to distance himself from the deal, insisting: 'That was a decision that was made by Lloyds and HBOS - it was a merger that they decided.

'The Government made possible the arrangements that followed their decision, but of course it was their decision to do so.'



Shadow Chancellor George Osborne said: 'Gordon Brown has a reputation for acting like Macavity when things go wrong, but even by his standards attempting to claim he had nothing to do with the Lloyds/HBOS merger is staggering.

'He claimed the credit last year for pushing these two banks together. He should demonstrate the leadership required to take responsibility for the consequences.'

More than 20,000 staff are likely to lose their jobs because of the merger. And the spiralling losses at HBOS mean the so-called 'Bank of Britain' - already 43 per cent owned by the taxpayer - might have to come back to the Government for another handout.



Talks with the Treasury over dumping the worst of its bad loans on the taxpayer remained deadlocked last night, but analysts believe the lender will seek guarantees worth £250billion.

Controversy will be stoked by Cummings's retirement deal, which experts said would be worth more than £400,000 a year.



Cummings, who was sacked in January, was paid more than £2.5million in salary and bonuses in 2007 - more than HBOS chief executive Andy Hornby.

Banking analyst Alex Potter said: 'The scale of the deterioration in the HBOS book has shocked us.'

Almost 50,000 Halifax Bank of Scotland mortgage customers are more than three months behind in their repayments, the bank revealed yesterday.

More worrying is the fact that nearly one in five HBOS borrowers has plunged into negative equity - where the size of the loan is greater than the value of the home.