Eight months of pressure that left Osório exhausted

QUESTIONS were raised yesterday over the man brought in as the miracle-worker who would execute a speedy turnaround of bailed-out banking giant Lloyds.

Expectations could hardly have been higher when the appointment of António Horta-Osório, former CEO of Santander UK, was announced, almost precisely a year ago.

He rode a wave of admiration in the City and concerted political support from UK Financial Investments (UKFI) and the treasury to land the job. His political supporters championed him as the man to fix up the loss-making, bailed-out high street giant for a speedy privatisation.

But a year later, his reputation as one of the City’s fastest rising stars lies in tatters, with some in hindsight now dubious over his appointment.

The decision to hire the youngest CEO of the UK’s major banks might have raised eyebrows if the City had not been so entranced by his charisma and his seemingly effortless integration of stricken assets at Santander UK.

Having inherited a messy, failing behemoth, he wowed investors by tackling issues that had languished on the bank’s balance to-do list for years: the forced sale of 600 branches, the repayment of the Bank of England’s special liquidity scheme, adapting to new capital rules and the hasty shrinkage of an unwieldy balance sheet.

But the to-do list only grew longer as the economy worsened. He brought in lieutenants from his old bank, clearing out some experienced Lloyds insiders.

Some were surprised when opportunities for several high-profile meetings with figures such as outgoing ECB president Jean-Claude Trichet and former US president Jimmy Carter presented themselves but Horta-Osório showed little interest. Others suggest he simply did not have time amid a seven-day diary of meetings.

It was on Monday that he reached breaking point, withdrawing from a scheduled appearance at a parliamentary committee. By 6pm the next day, his board was left with no CEO and a CFO already on his way out. So much for a return to “boring banking”.

TIM Tookey, who is taking over at Lloyds Banking Group as its interim chief executive, has reassured his future employers that he will definitely be joining them in the New Year.
Tookey, currently the bank’s chief financial officer, is currently working out his notice before joining Friends Life next March.

On Monday evening, after learning that he had been appointed to the top job at Lloyds, albeit on an interim basis, Tookey spoke with Andy Briggs at Friends Life to give him reassurances that he would still be on his way, “whatever happened” at Lloyds.

Tookey, who was at Lloyds Banking Group during its disastrous acquisition of HBOS, is not considered likely to be offered the top job at Lloyds full-time in any case, given that the part government-owned bank has been keen to distance itself from its recent past, in particular the HBOS acquisition.