Lloyds Bank boss's illness shakes City confidence

Horta-Osorio takes time off suffering from fatigue but investors question whether he will return

The City was shaken yesterday after Lloyds Banking Group's chief executive, Antonio Horta-Osorio, took the rest of this year off on health grounds after eight months in the job.

Mr Horta-Osorio, who arrived at Lloyds from Santander UK amid much fanfare, is said to be suffering from extreme fatigue due to overwork. On strong medical advice, he has taken time off to recover.

Lloyds' finance director, Tim Tookey, will run Britain's biggest retail bank temporarily amid renewed market turmoil. Mr Tookey resigned from Lloyds in September, and is serving out his last few months.

Lloyds insisted yesterday that Mr Horta-Osorio, hailed as one of the top bankers of his generation, would be back at the helm by the new year. But the assurances failed to calm investors, who sent the shares down more than 4 per cent, making Lloyds the worst performer in the FTSE 100.

Some investors questioned whether Mr Horta-Osorio, who is 47, would ever return to the job.

A Lloyds shareholder, who chose to remain anonymous, said yesterday: "The whole thing is very unsatisfactory and I can see why people have said: 'I don't know what's going on and I'm going to sell.'

"I doubt he will be able to come back and run the business. If you can't cope with stress, you can't cope with it and to say he will be back by the end of the year is bizarre."

Mr Horta-Osorio has had a full in-tray since arriving at the part-nationalised bank in late February.

As well as setting out a new strategy and ordering 15,000 job cuts he has been trying to sell more than 600 branches under orders from the European Union and has been in negotiations with the Independent Commission on Banking.

Relaxed and charming in public, the Portuguese banker is said to be driven, demanding and obsessed by detail when it comes to business. Luring Mr Horta-Osorio from Santander was seen as a coup for Lloyds and the Government, which needs Lloyds to be rebuilt to have any chance of making a profit on its 41 per cent bailout stake.

The anonymous Lloyds shareholder said he expected the Government to act quickly to "parachute" a new boss in to Lloyds to fill a leadership vacuum. Despite being surplus to requirements, Mr Tookey was apparently the only choice to stand in after Mr Horta-Osorio ruthlessly jettisoned the bank's old guard soon after arriving.

Paul Mumford, a fund manager at Cavendish Asset Management, said: "If he is feeling the strain and feels he can't cope it may be a situation where they should find someone else. If he didn't come back it would be a bit of a disappointment but he has had time to do some reasonably sensible things and set a strategy."

Lloyds would have a problem finding a banker with a similar reputation to Mr Horta-Osorio, who made his name building Santander's UK business through a series of deals, including the purchase of Alliance & Leicester, and aggressive product launches.

Ian Gordon, a banking analyst at Evolution Securities, said that Mark Fisher, Lloyds' head of operations, could do the job because it was an unglamorous restructuring project that did not require a star banker.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Arts and Entertainment
British musician Mark Ronson arrives for the UK premiere of the film 'Mortdecai'
music
Voices
Winston Churchill, then prime minister, outside No 10 in June 1943
voicesA C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
News
i100
Sport
footballBrighton vs Arsenal match report
Arts and Entertainment
Benedict Cumberbatch has spoken about the lack of opportunities for black British actors in the UK
film
News
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Recruitment Genius: Outbound Sales Executive - OTE £25,000

£16000 - £25000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Java Developer / J2EE Developer - Watford - £45,000 - £47,000

£45000 - £47000 per annum + bonus + benefits: Ashdown Group: Java Developer / ...

Ashdown Group: Marketing Product Manager - (Financial Services) - SW London

£35000 - £38000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Day In a Page

Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea
America: Land of the free, home of the political dynasty

America: Land of the free, home of the political dynasty

These days in the US things are pretty much stuck where they are, both in politics and society at large, says Rupert Cornwell
A graphic history of US civil rights – in comic book form

A graphic history of US civil rights – in comic book form

A veteran of the Fifties campaigns is inspiring a new generation of activists
Winston Churchill: the enigma of a British hero

Winston Churchill: the enigma of a British hero

A C Benson called him 'a horrid little fellow', George Orwell would have shot him, but what a giant he seems now, says DJ Taylor
Growing mussels: Precious freshwater shellfish are thriving in a unique green project

Growing mussels

Precious freshwater shellfish are thriving in a unique green project
Diana Krall: The jazz singer on being friends with Elton John, outer space and skiing in Dubai

Diana Krall interview

The jazz singer on being friends with Elton John, outer space and skiing in Dubai
Pinstriped for action: A glimpse of what the very rich man will be wearing this winter

Pinstriped for action

A glimpse of what the very rich man will be wearing this winter
Russell T Davies & Ben Cook: 'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'

Russell T Davies & Ben Cook: How we met

'Our friendship flourished online. You can share some very revelatory moments at four in the morning…'
Bill Granger recipes: Our chef serves up his favourite Japanese dishes

Bill Granger's Japanese recipes

Stock up on mirin, soy and miso and you have the makings of everyday Japanese cuisine
Michael Calvin: How we need more Eric Cantonas to knock some sense into us

Michael Calvin's Last Word

How we need more Eric Cantonas to knock some sense into us