Lloyds Chairman Bischoff Retires as Bank Returns to ProfitGavin Finch
Lloyds Banking Group Plc Chairman Win Bischoff will retire after more than three years in the job, saying the British bank’s rebound from its 2008 government rescue has progressed enough for him to move on.
Bischoff, 72, will leave before May 2014, depending on when his successor is announced, Britain’s biggest mortgage lender said in a statement today.
The veteran of London’s City financial district has been chairman since 2009 after holding the same role at Citigroup Inc., the U.S. bank he sold Schroders Plc to after a 30-year career at the British firm. At Lloyds, which ceded a 39 percent stake to the U.K. state after its 20 billion-pound ($31 billion) bailout in 2008, Bischoff hired Antonio Horta-Osorio as chief executive in 2010 and oversaw a return to profit since then.
“He’s overseen the stabilization of Lloyds in terms of balance sheet restructuring and the overhaul of the management team,” said Gary Greenwood, an analyst at Shore Capital Ltd. in Liverpool, England, with a hold rating on the shares. “Now we’re looking at the next leg, which is basically privatizing it and returning it to a decent level of profitability.”
On April 30, Lloyds posted a near-threefold increase in first-quarter profit as impairments for souring loans dropped. The shares have risen about 8 percent since then. The British government is seeking to reduce its stakes in Lloyds and Royal Bank of Scotland Group Plc before an election due in 2015.
“Lloyds has, over the past four years, made significant progress in its goal to become a strong, efficient, U.K.-focused retail and commercial bank,” and “in many areas, it is ahead of plan,” Bischoff said in the statement. It’s “therefore a good time to start the search for my successor.”
Lloyds shares fell 2.3 percent to 57.57 pence at 9:53 a.m. in London trading.
Anthony Watson, the bank’s senior independent director, is leading the search for a new chairman. Bischoff had said in July that he planned to retire from Lloyds within one to two years.
After agreeing to sell Schroders’s investment-banking unit to Citigroup in 2000, Bischoff joined the U.S. bank and became chairman in 2007 after Charles O. “Chuck” Prince quit amid mounting mortgage losses.
Lloyds’s first-quarter pretax profit rose to 1.48 billion pounds from 497 million pounds in the year-earlier period, beating the 1.03 billion-pound median estimate of nine analysts surveyed by Bloomberg. Provisions fell 40 percent to 1 billion pounds.
The bank’s bailout stemmed from its government-brokered takeover of HBOS Plc during the financial crisis. Since then, a turnaround has been hampered by about 6.8 billion pounds of redress for improperly sold loan insurance and 12.1 billion pounds of losses tied to the real estate collapse in Ireland.
Lloyds has eliminated more than 35,000 jobs since its 2008 bailout and announced plans to close more than half of its 30 overseas units to focus on Britain. In the past two years, the bank has shrunk its so-called non-core division by more than half to 92 billion pounds.