New Lloyds chief shakes up operations

The new boss of taxpayer-backed Lloyds Banking Group stamped his mark on the bank today by unveiling a shake-up of its insurance and retail divisions.

The overhaul will see the departures of Archie Kane, head of insurance and Scotland, who is to retire, while retail head and most senior female employee Helen Weir has decided to leave, the bank said.

Chief executive Antonio Horta-Osorio plans to split the insurance arm into two separate divisions, while retail will be led by Antonio Lorenzo, group director for the wealth and international division.

Mr Horta-Osorio, who took over as chief executive from Eric Daniels earlier this month, is rolling out a strategic overhaul of the business, which will include speeding up plans to offload more than 600 branches as part of its commitment to meet state aid rules.

Mr Kane, who received a £590,000 base salary for 2010, and Mrs Weir, who earned £625,000 base salary last year, will receive no compensation beyond their contractual entitlements on leaving the group.

Lloyds, which is 41% state-owned, said Mr Kane and Mrs Weir, who both sit on the board, will not seek re-election at the group's annual general meeting on May 18.

Mr Kane joined TSB in 1986 and has been a member of the group board since 2000, while Mrs Weir - well known for telling the Treasury Select Committee she did not know how much she paid in bank charges - joined in 2004.

The insurance division will be split into Life, Pensions and Investments and General Insurance and will report directly to Mr Horta-Osorio.

The move is likely to increase speculation Lloyds might reduce its insurance business through a potential disposal.

Bruce Packard, financial analyst at Seymour Pierce Research, said: "Though we don't know the details, it seems likely that the two managers, who were reasonably well regarded, have chosen to leave following the appointment of an external candidate to be chief executive."

Mr Lorenzo, who was brought to Lloyds by Mr Horta-Osorio from Spanish bank Santander, will lead Retail Products and Marketing.

Elsewhere, the Lloyds TSB and Bank of Scotland community banks will continue to be led by Joy Griffiths, while the Halifax bank will continue to be headed by David Nicholson.

Mr Horta-Osorio, previously head of Santander's UK business, said: "These changes to the group's management team will enable us to focus on meeting our 2011 targets, while putting in place some of the foundations which will enable us to deliver on our longer-term plans following the conclusion of the strategic review which is currently under way."

Mr Horta-Osorio will reveal full details of his strategic plans for the group in the summer, around the end of the bank's first half in June.

But the group has already revealed it was pushing ahead with plans to complete the sale of 600 branches - which include Cheltenham & Gloucester, the TSB brand and Intelligent Finance - to satisfy a European Commission order.

Last month, Lloyds Banking Group reported annual profits for the first time since the financial crisis, with pre-tax profits of £2.2 billion in 2010 against a £6.3 billion loss the previous year.

Comments