Lloyds CEO Horta-Osorio to Take Medical Leave, FT Reports

Antonio Horta-Osorio will step down as chief executive officer of Lloyds Banking Group Plc for health reasons, the Financial Times reported.

The medical leave may be announced today and is likely to last at least six months, the newspaper reported, citing “senior” executives it didn’t name. Doctors told Horta-Osorio to step down because of stress, according to the FT.

The Lloyds board meets today and may ask outgoing finance director Tim Tookey to serve as acting CEO, the FT said.

Horta-Osorio has sought to wean Britain’s biggest mortgage lender off low-interest government loans, pushing costs up as the bank shifts to more expensive wholesale funding. Lloyds, scheduled to report third-quarter earnings on Nov. 8, said last month its net interest margin would narrow in the second half.

Lloyds and fellow government-backed lender Royal Bank of Scotland Group Plc had their credit ratings cut on Oct. 13 by Fitch Ratings, which said the U.K. is less likely to provide support in future. Lenders are under pressure from regulators to replenish capital after writedowns of Greek and other European peripheral sovereign debt.

Lloyds shares have lost 53 percent this year, falling 6 percent to 30.56 pence in London yesterday. European bank stocks slumped the most in more than two months on Greek Prime Minister George Papandreou’s decision to call a referendum and a confidence vote, potentially derailing bailout efforts.

A spokesman for Lloyds wasn’t immediately able to comment when contacted by telephone today.

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