Antonio Horta-Osorio knighthood9 Oct 2018 10:13
Antonio Horta-Osorio: my rocky ride in the saddle at Lloyds
Having spent more than half his working life in Britain, Horta-Osorio, 54, has had time to absorb this society’s troubled relationship with financial services. Even aside from HBOS Reading, his ride at Lloyds has sometimes been rocky.
Last year he celebrated a milestone when the government sold the last of its 43% stake. Horta-Osorio — a competitive, driven character who is said to have retaken a university exam in the summer so he could get the highest mark ever — says he has achieved a “clear, objectively successful turnaround”.
However, the Lloyds share price has stubbornly refused to budge. It now trades at about 59p — less than the level it stood at when he joined in January 2011.
Lloyds’ boss says the share prices of domestic and international companies diverged after the Brexit vote two years ago, as sterling’s devaluation gave an automatic 20% boost to those whose balance sheets were denominated in dollars or euros, and uncertainty weighed on those dependent on British consumers.
“Does that frustrate me?” he asks. “Not really. When I look at the operational performance, I see it improving constantly. We are more or less at the same share price that we were six, seven years ago. Fine. The other local banks have halved, so, relatively, Lloyds’ share price has performed quite well.”
Most of the twists and turns in his Lloyds journey have been financial, however. Shortly after starting, he set aside £3.2bn as compensation for mis-sold payment protection insurance (PPI). At the time, the amount was seen as hugely pessimistic. So far, Lloyds has paid out in excess of £19bn.
On the other side of the picture, the bank’s core tier one capital ratio — a key measure of strength — has doubled to 14% since 2011. Ian Gordon, an analyst at Investec, predicts pre-tax profits of £6.2bn this year and £7.1bn next, set against losses of £3.5bn in 2011 and £570m in 2012. Gordon says: “Antonio has done a fair job. His financial stewardship has been solid, he’s implemented a radical programme of stripping out costs and he seems to focus on being politically correct in terms of supporting UK plc.”
Horta-Osorio calls himself a chief executive first and a banker second. “I am a manager. It happens I specialise in banks, because banking is a sector I really like, but I think as a leader you should really have a purpose beyond creating wealth.”
Hence the focus on SMEs and initiatives such as the training centre near Coventry. Did a knighthood ever cross his mind when he first accepted the Lloyds job? “No, I did it because I thought I could do it. I thought it would be a fantastic challenge, together with a great team, to turn around the largest retail and commercial bank in the UK and help the economy to recover . . . And
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