NEWSMAKER-Horta-Osorio vindicated by Lloyds Bank share sale
* Government share sale marks turnaround at state-backed bank
* Sale a vindication for CEO after enforced absence
* Britain to raise 3.3 bln stg from sale
LONDON, Sept 16 (Reuters) - For Chief Executive Antonio Horta-Osorio, Britain's move to sell a 3.3 billion pound ($5.3 billion) stake in Lloyds Banking Group is a vindication after his leadership was nearly derailed by health issues just months into his tenure.
The Lloyds share sale, announced after Monday's close, caps a remarkable 12 months for the 49-year-old, named 2013's "Banker of the Year" as Lloyds returned to profit and the value of its shares more than doubled, a turnaround all the more striking following his rocky first year in the role.
The Portuguese banker was poached from Spain's Santander , taking the helm in March 2011, but ended that year taking two months off on doctors orders after suffering sleep deprivation and exhaustion from the stresses of trying to rehabilitate the ailing bank.
Horta-Osorio has described that experience as humbling, but there is widespread praise for the way he bounced back.
"In this industry it can be a stigma to be off with anything related to stress, so it's impressive to see him back and not only fully recovered but with his credibility enhanced," said one senior industry executive at a rival bank, who like several others interviewed for this story asked not to be named.
On returning from his absence, Horta-Osorio cut the number of executives directly reporting to him and in general tried to have a better work-life balance. Colleagues say he delegates more, but is still intensely hard-working and driven.
"Leadership is a lonely thing. When you have to make tough decisions in relation to strategy or very important issues you have to take them in the end alone," Horta-Osorio recently told the BBC, in his first television interview since becoming Lloyds' boss.
"In turnaround situations, such as in the case of Lloyds, you really have to make very tough decisions in critical moments and they normally can't be collegiate."
Former colleagues talk of Horta-Osorio's commanding presence and authority and add that he can lay on the charm when required.
"When Antonio walked in, the room would go quiet," said one.
"He had the potential to be quite intimidating. You had to know all your facts and figures before meeting him, you had to be prepared," said another.
Horta-Osorio has made some significant changes at Lloyds that have been deemed successful, simplifying the business and slimming down to focus on lending to UK households and businesses and meet tougher regulatory requirements on capital.
But there have been bumps in the road.
Lloyds has repeatedly underestimated the cost of compensating customers for mis-selling insurance products and has now set aside 7.3 billion for the scandal, the most of any bank.
Lawmakers are also examining why the bank pursued a deal to sell hundreds of branches to the Co-operative Bank prior to a 1.5 billion capital shortfall at the mutual being revealed.
Despite those travails, analysts say the bank's turnaround has been quicker than expected and its recovery smoother than that of part-nationalised rival Royal Bank of Scotland.
Lloyds said in August it was ahead of schedule on its goals for cost savings and capital strength after beating forecasts with a near trebling of first-half underlying profit.
A relaxed Horta-Osorio was able to deliver those results with a wide grin.
"When Antonio wants something to be done and finished and clean it is done quickly," said Lloyds' Group Director of Retail Alison Brittain.
The bank's return to health has vindicated Horta-Osario's decision to join Lloyds rather than stay at Santander, where he was head of its UK bank. He had been at Santander for 18 years and its chairman Emilio Botin reportedly tried to keep him by promising him the CEO role within two or three years.
The married father of three, a keen scuba diver and tennis player, said his love of London was a big factor in his decision. From an affluent Portuguese family, he may also have political ambitions in his homeland, according to colleagues, and has consciously maintained a high-profile there.
Horta-Osorio has proved he can work with government and regulators in his tenure at Lloyds, largely avoiding the tensions that led to his counterpart at RBS, Stephen Hester, getting the sack in June in a move backed by Britain's finance ministry.
His deft diplomacy was illustrated earlier this year when he avoided a row over his pay by linking his future bonuses to a sale of the government's shares.
"He drives his organisation very hard and does a great job keeping his external stakeholders happy - regulators, Treasury, ministers, politicians," a government source said.
After graduating in management and business from Universidade Catolica Portuguesa and with an MBA from business school INSEAD, Horta-Osorio started his career at Citigroup in Portugal and later joined Goldman Sachs for two years in New York and London, focusing on corporate finance activities in Portugal.
He joined Santander in 1993, and ran operations in Portugal and Brazil before arriving in Britain in 2004, after squeezing in an advanced management program at Harvard, an 8-week intensive course for senior managers.
"He knows the business inside out," said a colleague. "The most striking about him is how in-depth his knowledge of the bank he is running is."