Daniels quits as Lloyds boss

LLOYDS Banking Group chief executive Eric Daniels yesterday became the third UK banking boss to quit his position in just two weeks, during a turbulent time at the top of the industry.

Lloyds said Daniels would retire in a year’s time, giving it time to conduct a thorough search for his successor both externally and within the bank.

Primary soundings from the banking industry have thrown up a number of high-profile potential candidates for the role, including Naguib Kheraj, the former chief executive of JP Morgan Cazenove; Fritz Seegers, who quit as head of retail and commercial banking at Barclays at the end of last year; and Douglas Flint, HSBC’s softly-spoken finance director.

The name of Stuart Gulliver, HSBC’s head of investment banking, was also being touted around yesterday in the City, though some believe that an investment banker would be unpalatable to the government, particularly given the furore over Bob Diamond’s appointment to the helm of Barclays earlier this month.

Lloyds’ head of retail banking Helen Weir is thought to be the most likely candidate if the bank plumps for an internal candidate.

Daniels’ decision to step down comes after the bank’s chairman Sir Win Bischoff started to make enquiries in the City about a potential successor earlier this year. In May, Bischoff approached former trade minister and Standard Chartered boss Lord Davies, though he has since accepted two positions as chairman of Hong Kong’s PineBridge Investments and as a partner at US buyout group Corsair Capital.


Daniels has had a rocky ride at Lloyds over the last two years, having shouldered the brunt of the blame for leading the disastrous acquisition of HBOS in 2008. The deal led the bank to the brink of bankruptcy, forcing it to accept a part-bailout from the government, which still holds a 41 per cent stake.

The Treasury yesterday insisted that the recruitment of Daniels’ successor would be a matter for the Lloyds board, adding that UKFI manages the taxpayer’s stake “at arm’s length”. However, government sources said the successful candidate would have to be “the right person at the right price”, suggesting the bank will come under significant political pressure not to lure a banking heavyweight with a generous pay package.

Lloyds investors yesterday appeared unruffled by the upheaval, with the shares gaining 2.75 per cent to close at 77.41p.