António Horta-Osório, the chief executive of Lloyds Banking Group who joined the part-nationalised lender at the beginning of the year, is poised to step back from his role as chief executive due to health reasons, according to senior executives.
It will be revealed at a board meeting on Wednesday that Mr Horta-Osório, who joined the bank with much fanfare from Spain’s Santander, has been ordered by his doctors to drop the role on grounds of stress. The time span of the medical leave is unclear, but it is likely to be at least six months, the senior executives said. However, one person close to the situation said Mr Horta-Osório hoped to be back at work by the end of the year.
The news pitches the leadership of Lloyds , part-owned by the UK government, into chaos. Tim Tookey, finance director, resigned over the summer, and is due to leave the bank in the coming months.
The board is expected to ask Mr Tookey to assume the role of acting chief executive, partly in the absence of any credible alternative. Mr Horta-Osório conducted a clear-out of senior executives shortly after his arrival, with no replacement for Mr Tookey yet identified, and his one big hire from outside – Nathan Bostock from Royal Bank of Scotland – is yet to arrive.
When Lloyds poached Mr Horta-Osório from Santander late last year, it was seen as a coup, giving a real boost to the government’s chances of being able to rebuild the troubled bank and exit its 41 percent shareholding at a profit. Since then, however, amid the deepening financial crisis, the value of Lloyds stock – like that of most other banks – has plummeted.
Lloyds had substantial exposure to the troubled Irish economy, which it has aggressively wound down but, unlike many euro zone rivals, it is strongly capitalised.
Colleagues of Mr Horta-Osório say he is an expert banker but an intense character, obsessed with his job, potentially triggering the health problems.
Lloyds declined to comment.