Lloyds boss under fire as profits slump: Antonio Horta-Osorio has earned £56m! But is he heading for the door?
THE boss of Lloyds took a £2million pay cut last year amid mounting speculation that his days at the bank are numbered.
Portuguese banker Antonio Horta-Osorio, who joined Lloyds as chief executive in 2011, pocketed £4.7million last year – 128 times the pay of his average employee.
This was down from £6.5million in 2018 and a peak of £11.5million in 2014.
Portuguese banker Antonio Horta-Osorio (pictured with wife Ana), who joined Lloyds as chief executive in 2011, pocketed £4.7million last year – 128 times the pay of his average employee
The 56-year-old is no longer Britain’s best-paid banking boss, losing his throne to Barclays’ Jes Staley, who bagged £5.9million for 2019.
Over his nine years at the bank, Horta-Osorio has raked in a massive £56.4million.
In that time, shareholders, including 2.4m individual savers, have seen the stock price slip by more than 6 per cent.
There was little to cheer yesterday as Lloyds revealed its profits slumped by 33 per cent last year to £3billion.
The bank was hit by another £2.5billion bill for the mis-selling of payment protection insurance – taking the total cost of the scandal to £22billion at Lloyds alone.
Chatter in the City indicates the clock may be ticking for Horta-Osorio, who has divided opinion with his handling of the PPI crisis and redress for victims of crooks at HBOS in Reading, though neither scandal happened on his watch.
One City source suggested it was time for new blood, while analysts said they would be surprised to see Horta-Osorio hang on for much more than a year.
Ian Gordon, a banking analyst at Investec, said: ‘Lloyds has made slight progress under Horta-Osorio in terms of its underlying performance.
‘The share price has gone nowhere, mainly due to PPI. It was he who held up the white flag and took responsibility, but then he thought the cost would be £3billion – not £22billion. So whether that was a good idea or not is up for debate.
‘I think he may stay for one or two years. He’s been in situ longer than most chief executives so I think it would be surprising if he stayed much longer.’
Joe Dickerson, at broker Jefferies, added: ‘His body language seems committed for the next couple of years, but any more would be a stretch.’
Even Horta-Osorio was non-committal on staying in his role past the end of 2020, when his current three-year strategy comes to an end. When asked whether he would remain for more than a year, he said: ‘I enjoy the job.
I like the people here at Lloyds. There are still things to do. And I am absolutely committed to seeing through the current strategy and nothing has changed.
‘We still have one year to go [on the current three-year strategy]. We are very pleased with the results of the first two years but we are not complacent.’
Horta-Osorio has been a controversial figure during his time at the bank. On the one hand, he was credited with smoothly steering Lloyds out of government ownership following its £20.3billion taxpayer bailout in the financial crisis.
And he helped change the brutal culture of British banking when he took an eight-week leave of absence in 2011 after suffering from mental health problems and exhaustion.
But his tenure has not been a hit with former customers of the Reading branch of HBOS, the troubled bank which Lloyds bought in 2008.
The scandal saw six bankers and advisers convicted of fraud in 2017 after scamming business customers out of £245million and using the money to pay for prostitutes and luxury holidays.
Lloyds paid out £102million in compensation to 71 customers. A report published in December found that its redress scheme had ‘serious shortcomings’.
Horta-Osorio was left red-faced by the findings, apologising to victims and promising to reassess their compensation.
The bank has also been hit harder by PPI claims than its competitors, and had to set aside £22billion to cover the costs.
But the bank boss was upbeat about the UK’s prospects for the year ahead.
He said: ‘With a new majority government in place, and the UK having left the EU, there is a clearer sense of direction and some signs of gradually improving economic indicators.’