Lloyds Bank boss Horta-Osorio to step down after a decade at the helm

Antonio Horta-Osorio CEO of Lloyds Banking Group leaves Downing Street in London, Britain, September 2, 2019. — Reuters pic
Antonio Horta-Osorio CEO of Lloyds Banking Group leaves Downing Street in London, Britain, September 2, 2019. — Reuters pic

LONDON, July 6 — Lloyds Bank Chief Executive Antonio Horta-Osorio said today he would step down next year after a decade at the helm, leaving Britain’s biggest domestic bank to find a successor to steer it through the coronavirus fallout.

While his departure had been expected, it comes at a critical time as banks brace for a wave of bad debts as customers struggle in an economy heading into a deep recession.

Horta-Osorio’s successor will need to push Lloyds further into wealth management and online services while finding a way to increase profits in an era of almost zero interest rates, analysts said.

His departure could also lead to some musical chairs at top banks with analysts speculating about both where Horta-Osorio might go next and who will replace him at Lloyds.

A Lloyds spokesman said a search for a successor that would include both internal and external candidates would begin imminently, adding that Horta-Osorio, 56, had given the company no indication of what he planned to do next.

Goodbody analyst John Cronin said Horta-Osorio could take the top job at Spain’s Santander or Unicredit, especially if the Italian bank’s boss Jean-Pierre Mustier were to switch to Lloyds.

Alison Brittain, head of hospitality company Whitbread and a former head of retail banking at Lloyds, is also likely to be linked to the role, as will RSA Insurance CEO Stephen Hester and former HSBC chief John Flint, Cronin said.

"While (Horta-Osorio) will be sorely missed, it is not surprising that he is planning to move on after what will be 10 years at the helm come 2021," he added.

JP Morgan analysts said Lloyds had a solid range of potential internal candidates including head of commercial banking David Oldfield, head of retail banking Vim Maru, and finance director William Chalmers, who joined last year.

‘Mixed emotions’

Lloyds shares have halved since Horta-Osorio took over in 2011, though they were higher for much of his tenure before slumping along with other bank stocks due to the coronavirus.

The bank’s shares were up two per cent today following the announcement, lagging rival lenders in the FTSE 100 stock index amid a broad market rally.

Horta-Osorio led a turnaround at Lloyds in the aftermath of its government rescue in the 2007-09 financial crisis and the bank returned fully to private hands in 2017.

During his time at Lloyds the Portuguese banker won plaudits for championing mental health issues at companies after he was signed off work for two months in 2011 for stress-induced insomnia and exhaustion.

But he faced strident criticism from lawmakers over his high pay package and for the bank’s handling of a major fraud at its HBOS Reading branch that led to six people being jailed in 2017.

Horta-Osorio said he would leave by June next year and was going with mixed emotions. He told staff in a memo seen by Reuters that leading Lloyds had been the job of a lifetime.

Lloyds said today it had appointed industry veteran Robin Budenberg as chairman. He will join the board in October before taking over from Norman Blackwell early next year.

Budenberg built his career in investment banking at SG Warburg and UBS. He advised the British government on its bailout of banks, including Lloyds, during the financial crisis.

He later led the UK Financial Investments company managing the state’s holdings in banks following the bailouts and is currently chairman of The Crown Estate, which manages Queen Elizabeth’s property holdings. — Reuters

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