The Lloyds Banking Group chief executive, António Horta-Osório, is to step down next year after a decade-long tenure that included the lender’s transition back into private hands after its £21bn state bailout during the banking crash.
Horta-Osório has told Lloyds he intends to step down in June 2021, the bank said, triggering a race for one of the most high-profile positions in the British financial services industry.
He will have earned more than £60m by the time he leaves the bank after 10 years in the job.
Lloyds also unveiled Robin Budenberg as its new chairman, replacing Lord Blackwell from next year.
The bank said the changes at the top would allow its new leadership team to bed in at the same time to work on the next stage of its development.
António Horta-Osório has led Lloyds for a decade, helping to guide the bank back to private ownership after its state bailout during the 2008-9 financial crisis.
Along the way, he has picked up more than £60m in pay and also helped highlight the importance of maintaining a work-life balance after he was signed off work for six weeks because of stress and fatigue.
“When an employee breaks a leg or suffers an infection, we know how to respond,” Horta-Osório wrote in an opinion piece for the Guardian in 2018. “Mental health should be dealt with in the same way. With a culture of adequate support and sufficient time off, an employee can return to work with confidence and without embarrassment.”
Mental health became central to Horta-Osório's mission in 2011 when after only eight months in the top job he admitted himself to the Priory clinic in London after being unable to sleep for five days. He stayed at the Priory for nine days and took a two-month leave of absence from work.
He said he was unable to get the bank off his mind. “You wake up very, very tired and you have to go to work and when you go back home at night you already know that you are not going to be able to sleep properly,” he said. “The message to people working in the City or anywhere else where they are under extreme pressure and suffering, with the benefit of hindsight, is to seek professional help immediately.”
Horta-Osório, who was born in Portugal and ran Santander UK before joining Lloyds, said it was his wife who urged him to seek help for his insomnia and helped him with his recovery.
In 2016 he was forced to write to all Lloyds employees to apologise for allegations about an affair with Wendy Piatt – a former aide to Tony Blair – while on a business trip to Singapore.
“My personal life is obviously a private matter as it is for anyone else,” he said. “But I deeply regret being the cause of so much adverse publicity and the damage that has been done to the group’s reputation."
Rupert Neate
Horta-Osório, the UK’s longest serving bank chief executive, said he had “mixed emotions” on leaving Lloyds, after a decade that included some of the most tumultuous times in the history of the banking industry.
The Portuguese banker took the job in March 2011, earning a £4.6m “golden hello”, after a stint as the UK chief executive of Spanish-owned lender Santander.
At the time, Lloyds was still in a parlous financial state after the banking crash of 2008, which led to a £21bn government bailout in return for a taxpayer-owned equity stake of 43%.
By the end of the year, exhaustion caused by work-related insomnia led him to take a temporary period of leave from the bank lasting from November 2011 until early January the next year.
Horta-Osório said his absence was brought on by a five-day period in which he did not sleep. It was to be his only extended time away from the bank during an often turbulent recovery from the banking crash.
Lloyds made its first annual profit since the crisis in the 2014 financial year and resumed dividend payments.
He was handsomely remunerated for the turnaround, taking home a £11.5m pay package for 2014.
Horta-Osório also had to wrestle with Lloyds’s role at the heart of the scandal over banks mis-selling payment protection insurance (PPI), which ended up costing the lender around £22bn.
In 2016, the Lloyds boss wrote to 75,000 employees to apologise for revelations about his private life and the damage they caused the group’s reputation.
In an email sent to the bank’s 75,000 staff, Horta-Osório said he regretted the bad publicity caused by allegations of an affair with Wendy Piatt, a former aide to Tony Blair.
But the following year, he presided over the bank’s return to entirely private hands, as the government completed the last of a series of share sales.
Earlier this year, he took a 28% cut to his £6.5m pay package after Lloyds reported a sharp fall in profits last year.
Blackwell said: “During his tenure, he has overseen a comprehensive transformation of the group’s balance sheet, operations and customer propositions, including the repayment of the UK government’s £21bn investment and evolution of the group into the UK’s largest digital bank.”
Horta-Osório said: “I have been honoured to play my part in the transformation of large parts of our business. I know that when I leave the group next year, it has the strategic, operational and management strength to build further on its leading market position.”
