Lloyds’ chief returns to work to face bigger challenges

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Lloyds Banking Group chief executive Antonio Horta-Osorio returned to work after two months’ sick leave yesterday, facing a potentially even bigger challenge turning around the partly state-owned lender than when he left.

Mr Horta-Osorio said: “I am thrilled to be back and I look forward to working with my colleagues again.”

Lloyds has said Mr Horta-Osorio, by his own admission a details-obsessed manager, will change his intensive working style and have fewer people reporting to him than the previous 13.

The 47-year-old Portuguese, who took over as chief executive in March, had been working on a turnaround strategy including 15,000 job cuts.

Since he went sick, the eurozone debt crisis has worsened and worries have grown about the pace of recovery in the UK.

As part of the overhaul, Lloyds is in talks to sell its operations in the United Arab Emirates, with Abu Dhabi Commercial Bank emerging as the favourite to pick up the business.

The bank confirmed it is considering options for its Middle Eastern unit.

Mr Horta-Osorio said his absence was due to sleep deprivation, which would have taken him to exhaustion if he had not stopped work, but from which he had recovered.

“From the moment I stopped and started sleeping I recovered very fast,” he told a Portuguese newspaper.

“I probably dedicated myself a tad too much and took things too personally, neglected all rest, and focused totally on the bank. I fully understand it when people say that I micromanage.”

Mr Horta-Osorio will hold meetings with people from within the bank and from outside over the next few weeks, a spokeswoman for Lloyds said. That is likely to include meetings with leading shareholders.

Lloyds warned it may miss financial targets due to the economic turmoil when it posted a third-quarter loss a week after Mr Horta-Osorio’s departure.

The bank, already saddled with tens of billions of pounds of losses from its takeover of troubled rival Halifax Bank of Scotland at the height of the 2008 crisis, could report another loss this year, analysts at Barclays Capital esti- mate.

It could notch up another £20bn in bad debts as the fragile economy sees credit quality deteriorate again, especially for mortgages.

Mr Horta-Osorio also faces being without a finance director for several months. Tim Tookey, who was acting chief executive for the past two months, is leaving at the end of next month and his replacement, George Culmer, is unlikely to arrive from insurer RSA until later in the year.

Lloyds employs around 15,000 people in Yorkshire as a whole and around 6,000 of its staff are based in Halifax.