IT was a Spanish newspaper report rather than a falling share price that prompted Lloyds to rush out the news that Antonio Horta-Osorio was set to take the reins yesterday.

However, the overdone sell-off that followed the bank’s third quarter update on Tuesday, which sent the firm’s stock down 3.2 per cent, provided proof that Eric Daniels needed to go.

It is true that Lloyds was less bullish than it had been earlier in the year, but analysts have been expecting the firm’s recovery to shift down a gear or two for some time.

Indeed, there were very few surprises in Tuesday’s statement. In a preview note released last week, analysts at Morgan Stanley got it spot on: the all-important net interest margin (NIM) would increase, but at a slower rate compared to the first half; impairments would fall, but not as quickly as they have been; and Lloyds would have made good progress weaning itself off of the life support machine that is the government’s special liquidity scheme.

Some investors were spooked by rising bad debts in Ireland, but it stands to reason that the Republic’s woes would impair the Dublin loan book. At any rate, the Irish business is a mere sideshow to the UK, home to the vast majority of customers.

That said, the market didn’t like Lloyds’ aversion to providing hard numbers in the update (even though it is often light on detail) and the toned-down rhetoric was enough to spark a sell-off, even as the rest of the FTSE gained.

That means investors didn’t buy into the Lloyds recovery story fully, and that they didn’t trust management. When that happens, it’s high time for change at the top.