New Lloyds chairman boosts efforts to speed up taxpayers’ stake sell-off

Lord Blackwell is expected to launch a review of the business to ensure a speedy sale of the taxpayers’ stake in the bank. (GETTY IMAGES)

The next chairman of Lloyds Banking Group, Lord Blackwell, is expected to launch a review of the business to ensure a speedy sale of the taxpayers’ remaining 33 per cent stake in the bank.

Blackwell, 61, whose appointment is expected to be rubber-stamped by the Treasury and City regulators early next week, will take over from Sir Win Bischoff at, or even before, Lloyds’ annual meeting next May.

The Tory peer, who was head of Prime Minister John Major’s policy unit, was a partner at McKinsey and worked at NatWest. He chairs Lloyds subsidiary Scottish Widows and joined the main board of the bank in June 2012.

Blackwell was chosen after a near six month search, including external and internal candidates, which was overseen by Lloyds’ non-executive director Tony Watson and headhunters Odgers Berndston.

One senior banker said: “Lloyds is in pretty reasonable shape now. The Government has already started selling its shares and this is one case where the City reckons that continuity is a good thing.”

Blackwell will work closely with chief executive Antonio Horta-Osorio on the next three year strategic review. Horta-Osorio’s first three- year strategy plan was launched in June 2011 and will need to be updated next year, when Lloyds is expected to re-emphasise its position as a primarily UK bank lending to UK consumers and businesses.

The Government sold its first 6 per cent stake in Lloyds for £3.2 billion at 75p a share two months ago. This raised hopes the entire stake could be sold by 2015.

Lloyds today also promoted its chief risk officer Juan Colombas to its main board. He was one of the executives Horta-Osorio poached from his former bank Santander UK and moved to Lloyds in January 2011.

Colombas is one of Lloyds’ highest paid staff. Last year he collected a £1 million-deferred shares bonus and a long-term incentive plan worth more than £500,000. It is thought that his salary, which will be made public next year, is around £1 million.

His promotion, as only the third executive director on the board, emphasises the importance the bank and its largest shareholder place on risk management.

Co-operative Bank bondholders had to vote in favour of the bank’s massive debt for equity swap to close its £1.5 billion balance sheet gap by 4.30pm today.

Although the hedge funds that would end up owning 70% of the bank have signed up to vote for the deal, thousands of small retail investors need to back it for it to go through.