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Bischoff plots clearout of Lloyds board

SIRWIN Bischoff, the new chairman of Lloyds Banking Group, is poised to make his mark with a boardroom reshuffle that will spell the end for non-executives associated with the ill-fated takeover of HBOS.<br /><br />Former Citigroup chair Bischoff, who officially succeeds the architect of the HBOS deal Sir Victor Blank on 15 September, is expected to wield the axe over the directors, as well as shrinking the executive board.<br /><br />The new regime could spell the end for non-executives Lord Leitch, Sir Julian Horn-Smith and Wolfgang Berndt, while executive director of insurance Archie Kane, his counterpart in wholesale banking Truett Tate and Helen Weir, head of retail, may also depart the board, but will retain their jobs and titles.<br /><br />Tony Watson, the former chief executive of Hermes Pension Management, and one-time JPMorgan banker Timothy Ryan, are expected to keep their positions, having been appointed with the blessing of UK Financial Investments, the organisation which manages the government&rsquo;s 43 per cent stake in the bank.<br /><br />Chief executive Eric Daniels is expected to survive the boardroom purge and is believed to be central to Bischoff&rsquo;s plans to revive the bank.<br /><br />Daniels is currently negotiating with the Treasury to reduce the bank&rsquo;s use of the Asset Protection Scheme (APS), which sees the government share losses on toxic assets with lenders in exchange for a fee.<br /><br />One option under consideration would see the bank beef up its capital position with the conversion of around &pound;6.8bn of preference shares into common stock, priced at a premium to limit the dilutive effect.