Summary Directors’ Report

Summary Directors’ Report

The information contained in the Summary Consolidated Income Statement, Summary Consolidated Balance Sheet, Our Remuneration Policy and Summary Directors’ Report is only a summary of the information which appears in the full Annual Report and Accounts.

Principal Activities
The principal activities of the Group are the provision of banking and other financial services in the UK and overseas.

Results and Dividends
The Group profit attributable to shareholders for the year ended 31 December 2007 was £4,045m (2006 £3,879m). The Directors propose a final dividend of 32.3 pence per ordinary share to be paid on 12 May 2008 to shareholders on the register on 14 March 2008. The final dividend brings the full year dividend to 48.9 pence, up 18% on 2006.

Business and Financial Reviews
Summarised extracts from the business and financial reviews contained in the Annual Report and Accounts are set out in the Chief Executive's Report and Corporate Responsibility.

Directors
The current Directors are:

Chairman
Dennis Stevenson

Deputy Chairman/Senior Independent Director
Sir Ron Garrick

Chief Executive
Andy Hornby

Executive Directors
Peter Cummings Jo Dawson  
Mike Ellis Philip Gore-Randall  
Colin Matthew Dan Watkins  
Non-executive Directors
Richard Cousins Charles Dunstone Anthony Hobson
Karen Jones John E Mack Coline McConville
Kate Nealon    
Directors appointed during 2007
Director Date of appointment
Richard Cousins 1 March 2007
John E Mack 1 May 2007
Dan Watkins 5 September 2007
Philip Gore-Randall 15 September 2007
Mike Ellis 25 September 2007

Sir Brian Ivory and David Shearer stood down from the Board at the Annual General Meeting (‘AGM’) on 25 April 2007; Benny Higgins stood down on 10 August 2007 and Phil Hodkinson stood down on 31 December 2007.

Richard Cousins was elected at the 2007 AGM; the remaining four new Directors will retire at the 2008 AGM and offer themselves for election. Dennis Stevenson, Karen Jones and Colin Matthew will retire by rotation and resolutions for their re-election will be proposed at the 2008 AGM. Having completed two three-year terms as a Non-executive Director
of HBOS, Charles Dunstone will retire at the forthcoming AGM and will not offer himself for re-election.

Auditors
The financial information set out in the summary financial statement does not constitute the Group’s statutory accounts for the year ended 31 December 2007 but is derived from those accounts. Statutory accounts for 2007 will be delivered to the Registrar of Companies following the Company’s AGM. The auditors have reported on those accounts; their report was unqualified and did not contain statements under sections 235(3), 237(2) or (3) of the Companies Act 1985. The Directors have also confirmed that they took steps to ensure the Company’s auditors were aware of all relevant information. A resolution to re-appoint KPMG Audit Plc as auditors will be put to shareholders at the AGM.

On behalf of the Board
Harry F Baines
Company Secretary & Group Counsel
26 February 2008

The Annual Review & Summary Financial Statement 2007 (‘SFS’) has been prepared solely for the Company’s members as a body. To the extent permitted by law, the Company, its Directors, employees, agents and advisers disclaim liability to any persons in respect of information contained in the SFS. By their nature, statements containing risks and uncertainties facing the Group, and any other forward-looking statements, involve uncertainty, since future events and circumstances can cause results and developments to differ materially from those anticipated. The forward-looking statements reflect the knowledge and information available at the date of the preparation of the SFS and the Company undertakes no obligation to update these forward-looking statements. Nothing in the SFS shall be construed as a profit forecast.

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