Stakes are high for Charlie Nunn as Lloyds goes for growth19 Feb 2023 09:18
On Wednesday, shareholders in the bank — the country’s biggest mortgage lender and savings provider and owner of Halifax, Bank of Scotland and Scottish Widows — will be hoping he can beat expectations again. He will be presenting its full-year results and providing the first update on his new five-year strategy, unveiled a year ago.
The stakes are high. On Friday, Nunn’s closest rival, Dame Alison Rose at NatWest, reported the highest profits for the bank since the financial crisis in 2008 — and ran into a storm about her £5.2 million pay packet.
Investors will also be looking for progress on Nunn’s pledge a year ago to spend £4 billion over five years to drive growth through diversification away from high street banking.
The former management consultant, who joined Lloyds in August 2021 after a jet-set career, including at HSBC, has set a different tone for a bank that had been on a painful recovery since its £20 billion taxpayer bailout in 2008.
Some 57,000 jobs had been lost by the time the last of the 43 per cent taxpayer stake had been sold off in 2017, largely the result of cost-cutting by Nunn’s predecessor António Horta-Osório.
Nunn’s aim is to generate half of the growth in Lloyds profits from routes other than the traditional source of banking profits. Lenders typically make their money from the difference between the rate they pay to savers and the rate they charge to borrowers. In banking jargon, that is the “net interest margin”. Bank margins are being helped by the sharp rise in the base rate from 0.1 per cent in December 2021 to 4 per cent now.
Among the aims of Nunn, 51, is to make more money from selling customers more products, such as home insurance, or pensions through Scottish Widows. He is plotting a bigger move into wealth management, targeting the bank’s two million customers that it calls “mass affluent”. These are people with £75,000 or more in wealth or annual income. To this end, Lloyds bought Embark, a digital platform for encouraging retired people to invest.
Lloyds also has its sights set on a move into the “build to rent” market; it has a project with Citra Living to build 50,000 homes. Overall, the aim is to generate £1.5 billion of revenue each year.
https://www.thetimes.co.uk/article/stakes-are-high-for-charlie-nunn-as-lloyds-goes-for-growth-p8df3k3gx
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