Lloyds’ new chief quickly makes his mark with board shake-up

Helen Weir, Lloyds’ board member with responsibility for the Halifax brand, will leave the group alongside Archie Kane, Lloyd’s insurance executive director.

The departures of two of Lloyds’ longest-serving directors follow Mr Horta-Osorio replacing Eric Daniels at the helm of the lender last week.

Analysts said they were surprised at the speed with which Mr Horta-Osorio has moved to replace the old guard.

Mr Horta-Osorio said: “These changes to the group’s management team will enable us to focus on meeting our 2011 targets, whilst putting in place some of the foundations which will enable us to deliver on our longer-term plans following the conclusion of the strategic review which is currently underway.”

There is no direct replacement for Mrs Weir. Antonio Lorenzo, who was brought to Lloyds by Mr Horta-Osorio from Spanish bank Santander, becomes retail products and marketing director as well as heading wealth and international. He reports to the chief executive.

Joy Griffiths will lead its Lloyds TSB and Bank of Scotland brands, while David Nicholson will continue to head its Halifax brand. Both will also report directly to the chief executive, rather than Mr Lorenzo.

Mrs Weir, a former manager at consultancy McKinsey & Co, arrived from retailer Kingfisher in 2004 as finance director before taking over the retail division in April 2008, months before Britain’s banks were plunged into crisis. At the time the move was seen as a step on the way to the top job. It is understood she was offered another board role but chose not to take it.

Mr Kane joined TSB in 1986 and has been a member of the group’s board since 2000. Mr Kane and Mrs Weir will not seek re-election at the group’s annual general meeting on May 18, and Mr Kane will retire.

Neither Mrs Weir or Mr Kane will receive a payout beyond their contracts, said the bank. “It is the new chief executive stamping his authority on the reporting lines,” said Simon Willis, banks analyst at stockbroker Daniel Stewart & Co.

Exane BNP Paribas analysts noted the only remaining board members from Mr Daniels’ team will be finance director Tim Tookey and wholesale director Truett Tate.

“We speculated that at least half the executive board would go during 2011,” they said in a note to clients. “With Daniels, Weir and Kane gone, that is three out of five within less than two months of the new CEO’s formal arrival, somewhat quicker than expected, albeit otherwise unsurprising.”

Bruce Packard, financial analyst at Seymour Pierce Research, said: “Though we don’t know the details, it seems likely that the two managers, who were reasonably well regarded, have chosen to leave following the appointment of an external candidate to be chief executive.”

Mr Horta-Osorio, the former head of Santander UK, led the Spanish bank on an ambitious acquisition spree that saw it snap up Alliance & Leicester plus Bradford & Bingley’s branch network and savings book.

At Lloyds he may have to fight to keep the bank together, with the Independent Commission on Banking considering forcing the group to unwind its merger with Halifax Bank of Scotland. The ICB is due to report recommendations in September.

Lloyds is 41 per cent owned by the taxpayer after being bailed out during the credit crisis when it was saddled with billions of pounds of losses from the takeover of HBOS in 2008.

Mr Horta-Osorio launched a strategic review last week and said the lender will not announce further branch closures until the end of the year.

Last month, Lloyds reported annual profits for the first time since the financial crisis, with pre-tax profits of £2.2bn in 2010 against £6.3bn losses the previous year.

Bank’s branch sale

Lloyds recently began the forced sale of 600 retail branches, offering suitors a chance to create Britain’s seventh biggest bank from one deal.

Lloyds was told by European authorities in November 2009 it had four years to sell at least 600 branches, 4.6 per cent of the personal current account market and 19 per cent of its mortgage book, to limit competition distortions.

The branches would create Britain’s seventh biggest bank or building society in terms of current accounts and branches and could be worth more than £3bn, analysts have said.

Suitors could include Virgin Money, Yorkshire Bank owner National Australia Bank or Spain’s BBVA.