Lloyds shares hit as confusion continues over leadership woes

Coupled with the news that high-flying RBS banker Nathan Bostock will no longer be joining the bank, the market took fright and Lloyds’ shares closed down a further seven per cent at 23.4p.

Lloyds shocked investors earlier this month with news that Mr Horta-Osorio was taking a break due to a stress-related illness.

Yesterday it said he is making “good progress in his recovery” and it looks “forward to his return at the end of the year”.

But this assertion was counterbalanced with the news that RBS’s chief risk officer Nathan Bostock, who was due to join Lloyds next year, has decided to stay at RBS. Mr Bostock had been keen to rejoin Mr Horta-Osorio, with whom he worked at Santander.

Lloyds chairman Win Bischoff said that as part of the bank’s contingency planning Mr Roberts, a former Barclays executive, will become interim chief executive in case Mr Horta-Osorio’s return is delayed.

Finance director Tim Tookey, who was appointed interim chief executive, is due to leave in February. Lloyds said yesterday it is in advanced talks with George Culmer, chief financial officer of RSA Group, over his appointment as Lloyds’s finance director.

Brown Shipley fund manager John Smith said: “It’s a very confusing situation. It’s still unclear who is running the ship, and there’s still a risk that Mr Horta-Osorio might not return.”