Abbey National boss Horta-Osorio takes charge of UK’s biggest bank Lloyds

Surely some mistake you’ll say but Antonio Horta-Osorio who made his reputation by catapulting Santander into being one of the UK’s Big Five banks with his reign at Abbey National and acquisition of Alliance & Leicester and the workable bits of Bradford & Bingley (now all rebranded Santander) is to succeed Eric Daniels as the new CEO of Lloyds Banking Group.

Lloyds, since its shotgun marriage with Halifax, is now the biggest UK bank with about 30 per cent of current accounts and around 25 per cent of mortgages and business lending. It’s 41 per cent-owned by the UK taxpayer following the credit crunch but back in profit and set to make megabucks when economic normality returns (if it ever does).

So Horta-Osorio is faced with a rather different challenge. Lloyds in the UK has such a massive market share that its biggest problem is persuading the regulators that it should hang on to it all. Santander, huge in Spain and Latin America, managed to boost its market share in the UK by pushing at an open door with the cheap buy-outs of Alliance & Leicester and B&B. It also snapped up hundreds of branches that Royal Bank of Scotland had to divest as a penalty for its bail-out by the UK government, also in the afore-mentioned credit crunch in the fall of 2008.

So why has Lloyds chosen Horta-Osorio, a man noted for his acquisitive instincts, when it actually wants to get smaller, but more profitable, in the UK? And it isn’t really anywhere else.

Well that’s part of the answer. Businesses need to keep growing and Horta-Osorio will be getting his chequebook out as soon as he can to buy banks in Europe and maybe further afield. But Lloyds will have to sell back the 41 per cent government stake before this is deemed acceptable.

And he’ll be able to say to the Government commission currently looking into competition in the UK banking sector that the power of Lloyds, and Barclays and HSBC and RBS/Nat West, was no impediment to Santander taking around 14 per cent of the market.

In the meantime Ana Patricia Botin, daughter of Santander big boss Emilio Botin, is taking over as the head of Santander UK. But she’s supposed to be tough cookie albeit a very well-connected one.

So at least there’s one woman at the head of a big British bank. Not Helen Weir, head of retail banking at Lloyds, who was the favourite to succeed Daniels.

Horta-Osorio is actually Portuguese. Maybe he’ll turn out to be the Jose Mourinho of UK banking.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.