Lloyds Bank has poached HSBC banker Charlie Nunn to be its new chief executive, replacing António Horta-Osório in the top job.
Mr Nunn’s appointment comes at a key time for Lloyds, which is working on a new plan to deal with the combined pressures of low interest rates, Brexit and recovering from the coronavirus pandemic.
The move will also complete a broader changing of the guard at the top of Lloyds, with Robin Budenberg due to take over as chairman on January 1 and William Chalmers having joined as chief financial officer last year.
Norman Blackwell, Lloyds’ outgoing chairman, said: “I am delighted that we have now completed the leadership succession by appointing Charlie as CEO to work alongside Robin Budenberg as the incoming chairman. I am confident that together they will provide the strong leadership required to carry forward the strategic transformation that will enable Lloyds Banking Group to succeed.”
Mr Nunn is global head of wealth and personal banking at HSBC, where he has worked since 2011. A keen cyclist and father of four, he was a protégé of John Flint, who previously ran the division before a shortlived stint as chief executive that ended with his ousting by chairman Mark Tucker.
Monday’s announcement was broadly welcomed by analysts and investors, despite the fact that Mr Nunn had not previously been considered a frontrunner for the job. Many analysts had expected the company to appoint an insider such as retail bank boss Vim Maru, or someone with more experience running a public company such as insurer RSA’s Stephen Hester.
However, supporters pointed out that, although Mr Nunn has a smaller public profile than some rivals, he is well known within the banking world after more than 15 years as a partner at management consultancies Accenture and McKinsey. Moreover, the business he is currently responsible for inside HSBC has significantly higher revenues and profits than Lloyds.
Andrew Coombs, analyst at Citigroup, described the decision as a “surprise”, but noted that Mr Nunn “has strong expertise in wealth and digital, two areas which Lloyds has made a priority”.
Lloyds is planning to extend a recent push into wealth management and insurance to help offset the pressures caused by prolonged low interest rates. A person close to the bank said Mr Nunn’s appointment would provide a further boost to its plans.
“We have had sustained investment, have a clear path and a clear level of ambition,” he said.
Former colleagues said Mr Nunn was popular inside HSBC, and several highlighted his “impressive intellect”.
The appointment reflects a broader trend among Europe’s top banks, which are increasingly looking for bosses who can bring technological expertise and avoid controversy. Earlier this year Swiss bank UBS appointed Ralph Hamers as chief executive despite a lack of experience in investment banking or wealth management — its two main business lines. The bank’s board were impressed with his success cutting costs and digitising operations at Dutch lender ING.
“Lloyds are the UK’s community bank. You don’t want a gunslinger here, you want someone with good values,” said one former colleague of Mr Nunn’s. “Tech knowledge is his primary gift to Lloyds, but he’s also a great leader and will make sure it sticks to its mission.”
Shares in Lloyds rose slightly on Monday, while the broader FTSE 100 dropped 0.7 per cent. The bank is often seen as a bellwether for the UK economy, and its stock has benefited from recent optimism about potential coronavirus vaccines, climbing by a third over the past month. However, its shares are still down about 40 per cent so far in 2020.
Mr Nunn will receive fixed pay worth about £2.4m, compared with the £2.6m Mr Horta-Osório will receive this year. Lloyds said his maximum remuneration level would be about 20 per cent lower than Mr Horta-Osório’s current arrangement.
Lloyds said Mr Nunn’s start date would depend on reaching an agreement with HSBC, where he has a notice period of six months and further “post-termination restrictions” for up to another six months.
Mr Horta-Osório, who has led Lloyds for a decade, is due to leave next June. The bank said that if he left before Mr Nunn’s arrival, Mr Chalmers would temporarily take over as chief executive.
The Portuguese executive successfully led the bank’s recovery from the financial crisis, returning it to profitability and the private sector, but his record was tarnished by his handling of several historic scandals, including the mis-selling of payment protection insurance.
Mr Budenberg, who has already joined the group’s board as a non-executive and who worked on the recruitment process, said: “I am excited about Charlie’s vision for Lloyds Banking Group . . . Given his career track record, he will bring world-class operational, technology and strategic expertise to build on the strengths of the existing management team.”
At HSBC, Mr Nunn will be replaced by Nuno Matos, currently chief of HSBC Europe.
Additional reporting by Oliver Ralph
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