Lloyds chaos as exec declines offer

Lloyds branchPA

Lloyds TSB hasn't had a great run with its executives. After chief executive António Horta-Osório took a leave of absence earlier this month, citing stress and exhaustion from his job, they were hoping to inject some good news by revealing they had hired Nathan Bostock as head of the wholesale division.

However, on Friday he pulled out. So what does this mean for Lloyds?

Bostock impact

Nathan Bostock was being hired from Royal Bank of Scotland. He was due to take charge of the wholesale division, and make dramatic inroads into dealing with the bank's toxic debts. However, on Friday he informed the company that he would not be making the move.

The reaction of the markets demonstrated a real lack of confidence in the business. This latest blow to the top team saw it lose 7% of its value to 23.42p. That's incredibly close to the low point it hit at the depths of the crisis when it was valued at 20p per share.

It is particularly striking that Bostock chose to stay put despite the fact that the Royal Bank of Scotland didn't offer him any sweeteners. He isn't getting a better package or a bigger role. He is stepping right back into the role he previously decided wasn't for him.

So what does it mean for Lloyds?

It's a sign that chaos at the top of Lloyds will continue for a while to come. Horta-Osório is apparently due back very soon, but the company also has a contingency plan to shoehorn non-executive David Roberts into the role if it remains open for too long. He insists that the heart problems that left him leaving his last executive post in 2009 are now being treated with medication.

Meanwhile, Truett Tate, who was previously set for a move to be vice chairman of client coverage, will stay in his job as head of wholesale.

And in a separate announcement, Lloyds said is was in 'advanced talks' with George Culmer to become finance director, replacing Tim Tookey who is off to Friends Life.

All this switching and retreating makes the casual observer wonder whether this is bringing uncertainty or insecurity to the leadership of the organisation.

If you're running a business for the long term this is absolutely the last thing you want. If you're a listed business it's going to concern your shareholders too - and let's not forget that the taxpayer is lumbered with 40% of this business.

The chairman has offered to stay on for another five years if the uncertainty continues. However, given that Sir Win Bischoff is in his 70s, that's not necessarily going to settle anyone's nerves.
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