Lloyds Names Roberts Interim Chief; RSA’s Culmer to Be CFO
Lloyds Banking Group Plc (LLOY), whose chief executive officer took medical leave this month, named a second interim CEO as shares of the lender hit their lowest in more than two-and-a-half years.
David Roberts, a former director at Barclays Plc and non- executive board member at Lloyds, will become interim CEO if Antonio Horta-Osorio’s return to work is delayed beyond Dec. 31, the London-based lender said in a statement today. Separately, RSA Insurance Group Plc (RSA)’s finance director, George Culmer, is leaving to take up the same job at Lloyds, the insurer said.
The 47 year-old Portuguese CEO has been absent from work following medical advice and was expected to return before the year’s end, the London-based bank said on Nov. 2. Finance Director Tim Tookey, who took over as interim CEO when Horta- Osorio stepped down, is leaving the bank in February to join insurer Friends Life. That could have left Britain’s second- biggest publicly owned lender without its two top executives.
The announcement “smacks of a knee-jerk response to market clamor for ‘clarity’ but provides nothing of the sort,” Ian Gordon, an analyst at Evolution Securities Ltd. in London, wrote in a note to clients today. “That Lloyds has identified David Roberts as an interim candidate for CEO does suggest that it may have the sense not to waste large amounts of time and money searching for a new external ‘big name’ successor.”
The shares fell 7.1 percent to 23.42 pence at the close in London, the lowest since March 2009. The stock has dropped 23 percent since Horta-Osorio’s announcement, paring the lender’s market value to 16.1 billion pounds ($25.2 billion).
Horta-Osorio became CEO in March and by June had set a new U.K.-focused strategy involving 15,000 jobs cuts and a withdrawal from more than half its 30 overseas units. Since then, the bank has lost 48 percent of its market value and on Nov. 8 said it may miss some of its 2014 income targets.
“The board is pleased that Antonio is making good progress and we are looking forward to his return at the end of the year,” Chairman Win Bischoff said in a statement today. “However, we recognize it is important that we formalize the contingency arrangements if Antonio’s return is delayed.”
Culmer, 49, will remain at RSA until the insurer agrees to a leaving date, the London-based firm said in a statement today. Culmer has a 12-month notice period, RSA said. Lloyds said today it is in “advanced talks” about appointing Culmer. “We look forward to him joining us,” Bischoff said in a statement.
Culmer joined the former Royal Sun Alliance in 2004 as then CEO Andy Haste was preparing a revival of the insurer, which posted five consecutive years of losses between 2000 and 2005 due to surging asbestos claims in the U.S. The pair cut jobs, sold the U.S. division and focused on growing in emerging markets as they returned the insurer to profit.
Royal Bank of Scotland Group Plc (RBS), Britain’s biggest government-owned bank, said today that Nathan Bostock, its chief risk officer, will not join Lloyds as head of the wholesale banking division as announced on July 19 and will stay at RBS.
Roberts, 49, joined the 41 percent government-owned bank in March last year as a non-executive director. He was previously head of international retail and commercial banking at Barclays and was a member of the group executive committee at Barclays before leaving in 2006.
Roberts was a non-executive director of U.K. airport operator BAA Ltd. and a non-executive director of Absa Group Limited, one of South Africa’s largest financial services groups, until 2006. He was chairman and CEO of Austrian lender Bawag PSK Bank from 2007 to 2009.
Lloyds said on Nov. 8 that profit before costs linked to the lender’s purchase of HBOS Plc fell 21 percent from the second quarter to 644 million pounds. Horta-Osorio’s predecessor at Lloyds, Eric Daniels, served as CEO for eight years from 2003 and oversaw the 2008 takeover of mortgage lender HBOS Plc, which led to a taxpayer bailout of more than 20 billion pounds.
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