The price action in Lloyds Banking Group on Wednesday morning:
The follows confirmation that chief executive António Horta-Osório (47) is taking a break. In the words of Pestowire he is: “physically and mentally exhausted, as a result of the way he has immersed himself in running Lloyds Banking Group”.
Now, at this juncture it would be easy to make some glib comment and then pull up the details of António’s remuneration package and say that’s what he gets paid.
Instead we’ll put up this comment from Bruce Packard, the banks analyst at Seymour Pierce:
We are sympathetic to the demands placed on a modern banking Chief Executive. Lloyds has £295bn of wholesale funding (of which half matures in less than one year) and total assets of £978.9bn, which quite understandably would cause anyone stress in the current capital market conditions.
Quite. It would be enough to keep anyone awake at night. As would the prospect of trying to sell or spin-off 600 branches in order to the keep the EU off his back.
There will also be sleepless nights for investors if, as seems likely, outgoing finance director Tim Tookey takes the helm during António’s leave of absence.
To say that the Lloyds numbers man is not rated by the market is something of an understatement. Here’s the reaction of one big bank.
Few in the market respect TT and think he’s quite lightweight. This is very negative. No sensible helm for 6 months.
Now, there’s some debate as to when António, the youngest CEO of a UK-listed bank by a country mile, will return. The broker above thinks six months, Lloyds says before Christmas and Pestowire reckons it might be the twelfth of never.
The big question is whether Mr Horta-Osorio will ever come back. A colleague of his said that he was becoming more and more tired, and his doctors ordered him to take a break.
And for once, we aren’t going to speculate.
Still, it’s somewhat concerning that a talented banker with a huge appetite for work has found the job of running a commercial lender all too much.
Update: 09.54am (London time)
Lloyds press release:
Further to our announcement earlier today, the Board of Lloyds Banking Group announces that Tim Tookey has been appointed interim Group Chief Executive during António Horta-Osório’s temporary leave of absence in addition to his role as Chief Financial Officer. As stated in our announcement earlier today, António Horta-Osório is expected to return to his position before the end of the year.
As planned, Lloyds Banking Group will announce its Interim Management Statement for the period to 30 September 2011 on 8 November.
Tookey in charge!
Lloyds chief to step back from helm – FT