Successor’s challenge will be to keep up the speed of non-core shrinkage

WHEN Lloyds chief António Horta-Osório retreated on to eight weeks’ sick leave last week (perhaps never to return), analysts were quick to point the finger at the bank’s 144 per cent loan-to-deposit (LTD) ratio as the likeliest source of stress.

With European interbank markets largely closed for anything but covered bonds, some suspect the bank has had trouble placing the £5-10bn in debt it had planned to issue in the second half of this year.

Horta-Osório promised to bring its LTD funding ratio down to 130 per cent, but given that Europe is awash with non-core assets being flogged by desperate lenders, the question is whether his successor (temporary or otherwise) can keep up the same momentum.