Lloyds chief Antonio Horta-Osorio's leave shocks markets

 

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The Independent Online

Taxpayer-backed Lloyds Banking Group shocked the markets today as it revealed its boss had taken an unexpected leave of absence because of illness.

Antonio Horta-Osorio, who became Lloyds chief executive in March, is understood to be suffering from fatigue due to overwork and has taken leave following medical advice.

Shares in the bank plunged more than 7% after the board revealed the 47-year-old, who is in the midst of implementing his strategic vision for the bank, hopes to return before the end of the year.

Group finance director Tim Tookey will take up the role of interim chief executive - but he is leaving the company in February to join Friends Provident life assurer Friends Life.

In a statement, Lloyds said: "The board of Lloyds Banking Group announces that following medical advice Antonio Horta-Osorio is taking a temporary leave of absence from his duties as group chief executive of the bank due to illness. Antonio is expected to return to his position before the end of the year."

Mr Horta-Osorio is, among other initiatives, overseeing an EU-imposed sale of 632 branches, a revamp of its Halifax brand and around 15,000 job losses.

The Portuguese banker, who yesterday missed a parliamentary committee meeting, takes leave less than a week before the banking giant is due to reveal its third-quarter results.

Lloyds reported a £3.3 billion pre-tax loss in the six months to June, compared with a £1.3 billion profit last year, as the cost of the payment protection insurance (PPI) scandal took its toll.

Stripping out the provision set aside for customers mis-sold PPI, the bank saw underlying profits plunge 31% to £1.1 billion as it struggled with the "subdued" economic climate.

As Mr Horta-Osorio battles to turn the underlying business around, he is also juggling the sale of 632 branches - dubbed Project Verde - which has been imposed by the EU in return for the £20 billion in state aid it received following the 2008 credit crisis.

However, the group is reportedly considering floating Verde as the likelihood of a sale to a private buyer looks less likely.

NBNK Investments, a takeover vehicle run by former Northern Rock boss Gary Hoffman, confirmed it had bid for Verde.

However, the offer, reported to be £1.5 billion, fell short of expectations and the bank is expected to concede by the end of the year that a flotation is likely.

Mr Horta-Osorio, distinguished by his slicked-back black hair and fashionable stubble, has a crucial task on his hands in lifting one of Britain's taxpayer-backed banks out of the financial mire.

The Harvard-educated businessman started his career at financial powerhouse Citigroup's Portuguese arm - while remaining as an assistant professor at the Universidade Catolica Portuguesa.

The lawyer's son then worked at Goldman Sachs in New York and London before joining Grupo Santander as chief executive of Banco Santander de Negocios Portugal in 1993.

Mr Horta-Osorio became chief executive of Santander-owned Abbey in 2006, which was later rebranded as Santander UK.

Lloyds Banking Group unveiled Mr Horta-Osorio as its new chief executive in November last year. He joined as executive director in January and started the job in March.

He was quick to stamp his mark on the business by unveiling a shake-up of its insurance and retail divisions.

PA

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