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Business News

Lloyds shakes up board to cut pressure on chief

Last of the old guard out as reorganisation gives more responsibility to division heads

Lloyds chief executive Antonio Horta-Osorio, who recently returned to work after taking two months off due to fatigue, has launched a major boardroom shake-up to take some of the pressure off his shoulders.

Mr Horta-Osorio, who was known for micro-managing the business before his health crisis, has cut the number of departments reporting directly to him to 10. Insiders said more managerial responsibility will now rest on his remaining divisional chiefs, giving him time to focus on strategy and longer term planning.

As part of the shake-up, Truett Tate, the last of the old guard of Lloyds high-ups who worked for previous chief executive Eric Daniels, is leaving. He was in charge of the wholesale division which handles banking for businesses.

Meanwhile, two of Horta-Osorio's former colleagues at Santander UK will take bigger roles: Alison Brittain will head the retail business and Antonio Lorenzo will add asset finance to his strategy, wealth management and international briefs.

Mr Tate's departure completes a clear-out of the executive directors who worked for Mr Daniels. The other departures since March are Helen Weir, head of retail banking, Archie Kane, head of insurance, and Tim Tookey, finance director.

Lloyds is still negotiating with Mr Daniels about clawing back some of the £1.45m bonus he was awarded for 2010 on the grounds that the bank's disastrous merger with HBOS, which forced a £20bn taxpayer bailout, left it in a much worse state than it had appeared.

Mr Tate is expected to get a 12-month pay-off based on his basic salary, which was raised to £656,000 last year. In 2010 his pay and bonus package was £1.6m.

Lloyds has yet to announce its bonus payouts for 2011, but is facing pressure in the wake of Stephen Hester of Royal Bank of Scotland's decision to turn down his £963,000 bonus for last year.

Lloyds, which is 41 per cent owned by the taxpayer, said the new structure, which was hammered out by Mr Horta-Osorio and the bank's chairman, Sir Win Bischoff, would see the number of reporting lines to the chief executive cut from 14 to 10.

Mr Horta-Osorio said: "The changes to the group's senior management team ensure we have the right organisational structure to deliver on our strategy and move to the next phase of Lloyds' transformation.

"When I started as chief executive, I felt it was vital to understand all the issues in the business, flatten the organisational structure and make sure we addressed the right priorities with a sense of urgency.