TAXPAYERS suffered a major blow yesterday as the departure of Lloyds’ star chief executive left the turnaround of the semi-nationalised lender in chaos.
António Horta-Osório was forced to take a leave of absence on medical advice after months spent accelerating a complete overhaul of the bank left him too exhausted to continue, the bank said.
Lloyds claimed he would be back at the helm by the end of the year, but many in the City were sceptical. Chief financial officer Tim Tookey, who is leaving in February to join Friends Life, took over as interim CEO.
Horta-Osório’s exit casts a shadow over what was already a darkening mood for Lloyds, which is under pressure to absorb a strategic overhaul, a troubled £1.5bn branch sale process, an accelerated shrinkage of its balance sheet, thousands of redundancies and calls to cut pay and lend more.
The target was to get the bank back on track in the next three-to-five years. But with no CEO and a deepening economic crisis, insiders now think it will take closer to five – or longer.
The delay will do little to help Lloyds’ nose-diving share price, which has seen the government’s emergency investment in the bank in 2008 sink further and further underwater
Horta-Osório’s departure leaves the bank’s top management divided between a leadership circle of his close lieutenants and a handful of Lloyds insiders who have only recently been promoted to senior executive roles.
The timing is especially damaging as the bank steps up its lobbying over the Vickers Commission reforms and new capital and liquidity rules.
The political pressures of the job are understood to have taken a harsh toll on Horta-Osório, with his repeated summons before parliamentary committees a particular point of stress.
Colleagues also suggested that his hands-on style had led to him taking too much responsibility for every aspect of the bank’s rehabilitation.
City analysts were already yesterday putting forward possible replacements for the charismatic Portuguese banker. Ian Gordon of Evolution Securities suggested that Lloyds should look internally for a replacement chief executive, suggesting Mark Fisher, director of group operations.
Others in the City are looking towards an outsider to take the helm. One banker suggested Andy Haste, the former chairman of the RSA insurance group, who quit recently to consider alternative roles in the financial services sector. A spokesperson for Haste said last night: “Andy has spoken to lots of people about lots of jobs.”