Yahoo Finance City bets on next Lloyds chief as António Horta-Osório steps down
The boss of Lloyds is to step down next year after a decade at the top in which he returned the bank to private ownership following a £20bn taxpayer bailout during the financial crisis.
António Horta-Osório will quit as chief executive by June 2021, and Lloyds also announced that banking veteran Robin Budenberg would succeed Lord Blackwell as chairman in October.
Sources said last October that the bank was in the “initial research” stage of finding a successor. John Cronin, a banks analyst at Goodbody, said Italian lender UniCredit's chief executive Jean-Pierre Mustier, Royal Bank of Scotland's former chief Stephen Hester or HSBC's ousted boss John Flint could all be in the frame as potential replacements.
Fahed Kunwar, a banks analyst at Redburn, said likely internal candidates to replace Mr Horta-Osorio include head of retail banking Vim Maru and commercial banking chief David Oldfield. The pair have been at the forefront of the bank's response to the coronavirus pandemic.
It is not yet known what the 56-year-old is planning to do next himself, although Mr Cronin said there could well be a case of “musical chairs" in the industry as he could replace Jean-Pierre Mustier at UniCredit if he were to leave for pastures new. Barclays boss Jes Staley is also thought likely to step down in the next few years.
The Portuguese banker's pay has attracted heavy criticism in recent years, with Lloyds facing a bruising backlash over his bonus scheme at its latest shareholder meeting. Mr Horta-Osorio has earned more than £50m during his time at the top.
One source said he is not being handed any “golden goodbye” despite Stuart Sinclair, the head of Lloyds' remuneration committee, last year claiming that no staff resented the chief pay package because he is a “winner” who is worth every penny.
Mr Sinclair said: “When I go out to see people who are on £22,000, £30,000, £40,000, they see Antonio as a winner because he bought this bank back from the brink.”
Last year, Mr Horta-Osorio’s pay was cut by more than a quarter to £4.73m – still around 128 times the average earned by the bank's workers. Prior to that, he was one of the best paid bank chiefs in the City.
Lloyds became the first British lender to repay its bailout, doing so in 2017 following one of the largest rescues during the 2008 global crisis.
Lord Blackwell paid tribute to Mr Horta-Osório, saying he had helped transform the bank's fortunes and brought it into the digital age. Lloyds has built up a major online operation but has also shut almost 600 branches in the past five years alone, sparking fury from critics who have accused the lender of abandoning customers in isolated towns and villages.
As well as steering Lloyds back into private ownership, Mr Horta-Osório also managed the bank's response to the mis-selling of payment protection insurance (PPI) – a scandal which forced it to shell out £21.9bn – and axed thousands of jobs.
He also became a campaigner for better mental health awareness while at the bank, following a battle with insomnia which forced him to take several weeks off early in his tenure.
Analysts at Goodbody said: “Despite the multiple external headwinds that the bank has faced during Horta-Osorio’s tenure, he has delivered a successful strategy overhaul as well as substantive transformation from an organisational efficiency perspective.
“While he will be sorely missed, it is not surprising that he is planning to move on after what will be 10 years at the helm come 2021.”
Lord Blackwell, a former policy chief to Margaret Thatcher and John Major, announced his intention to hand over the reins last year.
Mr Budenberg was previously chief executive – then chairman – of UK Financial Investments, the body charged with managing the Government's bailout of banks after the financial crisis, including the stake in Lloyds which it has now sold down. He is currently chairman of the Crown Estate, a role that he will retain.
Shares rose 2.2pc to 31.7p.
