£60m Lloyds man bows out on a high
Profits hit £1.9bn as boss ends decade in charge
ANTONIO Horta-Osorio ended his decade in charge of Lloyds Bank on a high as he posted bumper profits for the first quarter of the year.
The Portuguese banker, who earned £60m during his time at the helm, said he was stepping down with ‘both pride and sadness’ after it made a profit of £1.9bn between January and March.
The sum, up from £74m a year earlier when the pandemic hit, was boosted by the release of £323m set aside to cover bad loans but no longer needed due to the improving economic outlook.
Lloyds shares hit their highest level since the pandemic began, rising 3.3pc, or 1.53p, to 45.11p.
The strong performance at the bank, which heralded its best month for mortgage approvals in March since before the financial crisis, will be a welcome leaving gift for Horta-Osorio who is due to take on a headache at Credit Suisse when he starts as chairman this week.
The 57-year-old declined to comment on whether he had had talks with his new colleagues, given the Greensill and Archegos crises engulfing the Swiss lender. But he reminisced on some of his proudest moments at Lloyds.
Horta-Osorio said: ‘Probably the highlight from this ten years has been the day [in 2017] when we were told by the Treasury at 4.40pm that they had sold their final shares. We quickly put everybody online and I congratulated the teams for having returned taxpayers’ money and some more.’
On the flip-side, Horta-Osorio said his early days and the ‘very weak financial condition’ in 2011 were a ‘real lowlight’.
Just months after he started, he spent time in rehab to treat stressinduced insomnia.
He said: ‘Banking is all about trust and therefore you can’t really speak freely about important financial problems that the bank had at the time. That led me to a period of exhaustion, where I had to take a few weeks out. Those were very bad days.’
Though Horta-Osorio was credited for returning Lloyds to profitability and private ownership, his tenure has not been free of controversy. He has been criticised for the treatment of victims whose businesses were ruined in the HBOS Reading fraud scandal.
The bank was forced to pay compensation after mistreating whistle-blower Sally Masterton, who authored a report claiming executives covered up the fraud. Former judge Dame Linda Dobbs is completing her report on whether the wrongdoing was investigated and reported properly. That, due this year, could further mark HortaOsorio’s record.
The Lloyds results are often seen as an economic bellwether due to its heavy exposure to British borrowers. Finance chief William Chalmers said: ‘We are not forecasting another lockdown. We are forecasting, within our assumptions, a potential increase in virus infections in some form of more modest third wave. That is not preventing us from improving our economic outlook.’
The mortgage book increased by £6bn in quarter, and £4bn went to first-time buyers. The end of the stamp duty holiday will probably reduce demand, it said, but changing habits – as borrowers seek homes with bigger gardens – would continue to drive demand.