Pitman hands over reins as Lloyds looks for foreign deal

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The Independent Online

Sir Brian Pitman yesterday announced that he is to step down next April as chairman of Lloyds TSB after what will have been 49 years with the bank.

Sir Brian Pitman yesterday announced that he is to step down next April as chairman of Lloyds TSB after what will have been 49 years with the bank.

His replacement was named as Maarten van den Bergh, a 58 year old Dutchman who earlier this year declined the opportunity to become the next chairman of Shell, the oil major, in order to spend more time in England, where he has made his home.

Hailing the appointment of Mr van den Bergh who will join the board as deputy chairman in October, the Lloyds TSB chairman said: "We were quite clear that we wanted a businessman. He will bring to the group exactly the right experience. He has helped a major industrial group through a major change process which has ensured that it remains a leader in the industry. He has a wealth of international experience and a very successful track record. He is also as keen on shareholder value as I am."

Shell has long been one of Lloyds' biggest corporate customers and Mr van den Bergh had many dealings with Sir Brian in his role as deputy group treasurer in the early 1980s and more recently as vice chairman responsible for finance and treasury within the Shell group.

Sir Brian's decision to go next year when he is 70 will mark the end of one of the most illustrious careers in British banking.

He leaves a bank which has been utterly transformed in the 18 years since he took over as chief executive. In that time he has turned Lloyds from being the smallest of the big four clearing banks into one of the world's biggest and most profitable financial institutions.

However, the durability of that achievement has been increasingly called into question over the last year as the stock market has become increasingly sceptical about the ability of the bank, which has grown largely through acquisition, to cope with the very different challenges thrown up by low-cost competition and a less permissive regulatory attitude to cost-cutting merger deals.

Yesterday's announcement came as the bank released half-year figures showing profits up 12 per cent pre-tax to £2.068bn. But the figures also showed margins, particularly in the core retail banking area, coming under threat as the bank followed rivals in chasing business to recover market share.

Lloyds shares slumped initially on the figures which were inflated by a one-off £127m upwards adjustment precipitated by last year's Scottish Widows takeover deal. But they later recovered as the market warmed to the prospects of a new internationally-minded leadership taking Lloyds into a big European merger. Lloyds shares closed up 14p at 600p.

Peter Ellwood, chief executive, said yesterday that the group was now looking most actively abroad for its next big deal. "Although there is still some scope in the UK in the mortgage business and in insurance, a truly transforming deal is not going to be possible in the UK. It is more likely in Europe or the United States," he said.