Lloyds' boss flunks stress test

Antonio Horta-Osorio Will Antonio Horta-Osorio ever return to Lloyds?

Antonio Horta-Osorio has been told by his doctors that he is physically and mentally exhausted, as a result of the way he has immersed himself in running Lloyds Banking Group.

He has been ordered by them to stand down as the semi-nationalised bank's chief executive for at least six to eight weeks - and that decision is expected to be ratified by Lloyds' board this morning.

He'll be replaced temporarily by Tim Tookey, the group's finance director - who, as bad luck would have it, is due to leave in February, for a top job in the insurance industry.

The big question is whether Mr Horta-Osorio will ever come back. A colleague of his said that he was becoming more and more tired, and his doctors ordered him to take a break.

The issue for him and his family is whether he is capable of doing the Lloyds job in a way that reduces the stresses and pressures on himself.

His temporary departure comes at a big moment for the bank - which is committed to decide by Christmas what to do with more than 600 branches and significant loans and deposits that it has been ordered by the European competition authorities to sell.

A Lloyds executive said he thought Mr Horta-Osorio would now take no part in that decision - which has been made more difficult by the collapse in bank share prices.

Lloyds has received just one takeover bid for this carved-out bank, which goes by the name of Verde. That bid is from the newly created NBNK.

The bank also has the option of trying to float the bank on the stock market, but right now either a sale to NBNK or a flotation would generate massive losses of around £2bn for Lloyds' shareholders - because the selling price of around £1.5bn would be significantly below the £3.6bn value of its capital.

So Lloyds is examining the possibility of simply giving Verde to existing Lloyds shareholders, of demerging it, because if the shares in Verde were a gift, there would be no detriment to Lloyds' owners from spinning out Verde in that way.

The problem is that the government would retain a 41% stake in Verde, in line with its existing 41% holding in Lloyds itself, and that would be contrary to the European Commission's stipulation that there must be no taxpayer stake in Verde.

That said, Lloyds may be able to persuade the European Commission to amend the disposal terms so that the government could retain a minority stake in a demerged Verde until market conditions were to make it possible to sell the stake.

Update 0934: For the avoidance of doubt, and as I said on Twitter, I would never trivialise stress - and I do not believe the punning headline on this post does that.

Robert Peston Article written by Robert Peston Robert Peston Economics editor

The UK's current-account Achilles' heel

Why it is a concern that the UK has a record current-account deficit at a time when demand for exports and economic growth are set to fall

Read full article

More on This Story


This entry is now closed for comments

Jump to comments pagination
  • rate this

    Comment number 17.

    An indication that he should never have been given the job. And I say that as a shareholder who has lost thousands. Very disappointing. Perhaps Helen Weir would have been the better choice.

  • rate this

    Comment number 16.

    An absolutely disgraceful pun of a headline and then snidey digs throughout the article

    I expect no better from Peston in all honesty.

  • rate this

    Comment number 15.

    People, you are critising the headline? Come on! This is not the point of the article! Obviously you don't get the point. Amazing.

  • rate this

    Comment number 14.

    I am not unhappy with the headline but from my own experience I wonder what the moderators would done with it had it come from a contributor. However it should be pointed out that these top jobs must involve some sort of stress although there are few public examples of its effect. Perhaps he should have delegated more! These large corporations depend on hundreds if not thousands for their success.

  • rate this

    Comment number 13.

    An absolutely disgraceful headline - you should be ashamed of yourself!

  • rate this

    Comment number 12.

    Abandon ship... Abandon ship....Poor Antonio, on a personal level, I feel sorry for any human being who cannot take it any more and 'stresses out'.
    But the cynic in me hard heartedly says,'maybe the good in that man couldn't take the lies any longer'.

  • rate this

    Comment number 11.

    Very embarrassing for the Lloyds Board, who must now be questioning their desire to replace Eric Daniels with such indecent haste. The new CEO was more suited to running the retail business of Lloyds, not the whole show, and was clearly out of his depth as shown by how the share price has performed during his tenure.

  • rate this

    Comment number 10.

    Not a dumb headline at all! It's catchy and humourous. I like it.

    Go Pesto!

  • rate this

    Comment number 9.

    I would really want to see ALL Correspondance from all involved including GB/former LLoyds chiefs re "taking over the TOXIC HBOS"...its scandalous that this government sponsored deal has bought down a GOOD Lloyds Bank!! Scandallous for staff, customers, shareholders (thats a lot of people - pension schemes) & tax payers. No one wins..HBOS should have been 100% nationlised or broken up.

  • rate this

    Comment number 8.

    I concur with the comments above. Out of order Mr. Peston. Stress at work is not something to be taken lightly.
    As a Lloyds employee (I am a very lowly LLoyds employee!) I had the pleasure of meeting Antonio and I was impressed with his drive and enthusiasm for his new role. The way he has immersed himself in his new role, well, it is no wonder he is off with stress!

  • rate this

    Comment number 7.

    This headline is offensive nonsense, worse than your usual superficial, scaremongering nonsense.

  • Comment number 6.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 5.

    So, what are you saying? That this guy isn't fit for the job? Or he's flakey? Or is it just some kind of snide swipe?
    Whichever, it reads as a pretty unpleasant piece.

    And it's about time we took absoloutely no notice of European competition guidelines and tell them to worry about something more important.

  • rate this

    Comment number 4.

    I find the headline in poor taste Robert, and not worthy of the BBC,

  • rate this

    Comment number 3.

    What a dumb headline and increasingly typical of the way the BBC handles news stories.

    Lloyds should stick two finders to the European competition authorities and remind them there are bigger anti competitive issues at stake.

    I say this as a lloyds customer and have no vested interest in their shareholders.

  • rate this

    Comment number 2.

    Whilst I have some sympathy on a personal level. The level of stress is one of the things that enables them to (try to) justify such high wages and Im sure that he will be on full pay etc where as many more lowly souls would be told to 'sling their hook' if they wanted 6 weeks off sick.

  • rate this

    Comment number 1.

    Not terribly happy that you seem to be treating the issue of stress lightly, with the title of this piece.


Page 14 of 14



BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.