THE EXHAUSTED boss of Lloyds Banking Group is to jump back in the saddle of the beleaguered lender after doctors said he made a “full recovery”, chairman Sir Win Bischoff has announced.
The bank also said that it has entered exclusive talks with the Co-operative Group over the sale of 632 branches, leaving rival bidder NBNK with nothing after it also lost out buying Northern Rock.
Announcing the return of António Horta-Osório to oversee the sale, Sir Win put his reputation on the line, saying that if his CEO has a relapse into the condition that forced him onto sudden sick leave five weeks ago, “I’d have to consider my position very carefully”.
“Antonio is a very determined fellow… he was very surprised that this happened,” said Sir Win, adding that the last time he saw Horta-Osório, he was “very well, very well, very well – bushy-tailed, terrific, big smile”.
Sir Win also described the illness: “He overdid it... Sleep deprivation, exhaustion, insomnia, whatever you want to call it – he slept very badly and too short.”
But “it is very, very, very unlikely to recur”, he said, after Horta-Osório insisted that he would run the bank differently by delegating tasks and potentially cutting down on the number of direct reports he receives from executives each day – which currently stands at 13.
“You can’t come back BAU – business as usual,” said Sir Win, adding that there would be “maximum senior management involvement” to help with “carrying some of the load”.
One senior source familiar with the bank said Horta-Osório, who used to run Santander UK, had demanded daily sales figures from almost every department, whereas Lloyds “was designed to be run as a portfolio of businesses”.
The source said: “One thing you learn moving slowly up an organisation – which he has never done – is that you have to accept people doing a job not as well as you could do it but to a high and acceptable level.”
The overhaul of his management style will mean that the Lloyds chief will have to take more of a back seat in talks over 632 branches that the bank is being forced to sell due to European competition law.
Months of negotiations lie ahead, in which would-be buyer the Co-operative Group will seek guarantees on a range of issues including retention of customer deposits, capitalising the branches, setting up their IT systems and cutting down their funding gap.
The Co-op had played hardball over the funding issue, insisting that Lloyds find a way to cut the gap down to no more than €5bn – mostly by ditching mortgage assets – whereas it began at some €30bn.
The aim is to reach a detailed agreement by the end of the first quarter in 2012.
Acting CEO and outgoing finance chief Tim Tookey said that Lloyds had chosen the Co-op over the cash shell NBNK because of “the execution risks associated with an existing player being less”.
He added that demands by the Independent Commission on Banking that the resulting entity have at least a six per cent market share of the current account market had not played a big role in the decision.
“If that had been the only factor we wouldn’t have had the two parties in the bidding that we had,” he said.