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Lloyds Banking Group's new CEO shakes up retail

AP News
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Posted: Mar 09, 2011 7:10 AM
Lloyds Banking Group's new CEO shakes up retail

The new chief executive of Lloyds Banking Group has moved swiftly to shake up the organization, announcing on Wednesday that the retail division is being restructured and that two members of the board are departing.

Antonio Horta-Osorio, who took over as head of the part-nationalized bank on March 1, said Archie Kane, executive director for insurance and Scotland, is retiring, and retail director Helen Weir is leaving the company. Both are stepping down from the board.

Lloyds Banking Group shares were up 0.1 percent at 61.6 pence in early trading on the London Stock Exchange.

Horta-Osorio has undertaken a strategic review of the bank, now 41 percent owned by the government; results of that review are expected to be announced by midyear.

Last month, Lloyds reported a net loss of 258 million pounds ($415 million) for the full year, compared with a 2.9 billion pound profit in 2009. Total income, net of insurance claims, rose to 24.96 billion pounds from 23.28 billion pounds.

The retail division accounts for 44 percent of Lloyds' revenue and commands a market share of 20-30 percent, including a 22 percent share of the mortgage market last year.

Retail Products and Marketing will be led by Antonio Lorenzo, who like Horta-Osorio recently moved to Lloyds from the Spanish bank Santander.

Joy Griffiths will head The Lloyds TSB and Bank of Scotland Community Banks, and David Nicholson remains as head of the Halifax Community Bank.

"These changes to the group's management team will enable us to focus on meeting our 2011 targets, whilst 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," said Horta-Osorio.

Ian Gordon, analyst at BNP Exane Paribas, said in a research note last week that Horta-Osorio has a reputation for cost reduction, "having already transformed Abbey National into the U.K.'s most efficient bank."

"Whereas much speculation ahead of his arrival has focussed on his deal-making credentials, we believe that it is his insatiable appetite for detail that will bring the greatest internal challenge and rigor to Lloyds existing businesses, and provide Antonio's greatest contribution to value creation at Lloyds," Gordon said.