Lloyds poaches its new boss from HSBC

The high-street lender has appointed Charlie Nunn, HSBC’s head of wealth management, to be its new CEO. He faces a towering in-tray. Matthew Partridge reports

Charlie Nunn
Charlie Nunn will not enjoy appearing before the Treasury select committee
(Image credit: © Alamy)

Lloyds Banking Group has “poached” HSBC’s Charlie Nunn to be its next CEO, replacing outgoing boss António Horta-Osório, “one of Britain’s best known executives”, say Harry Wilson and Stefania Spezzati on Bloomberg. This reinforces Horta-Osório’s strategy of making a “bigger push into managing money for individuals” in order to diversify the bank’s revenue: Nunn is HSBC’s head of wealth and personal banking.

Lloyds shouldn’t assume that boosting sales by expanding wealth management services is a surefire route to success, says Lex in the Financial Times. Even if it does become one of the top three providers in the UK, it will be “tough” to make a lot more money from it given that fees in the industry are in long-term decline and top-quality wealth managers “remain costly”. Meanwhile the bank will have to deal with the effects of Covid-19, which has wiped out “the income equivalent of 40% of the past year’s cost base”. Given these problems, “a recovery to pre-pandemic levels of business” may be the best it can hope for.

An opaque transition process

The situation is also complicated by the fact that despite the supposedly “rigorous” selection process, Lloyds is not only unable to say “when Nunn will actually be joining” but also “remains unsure as to when Horta-Osório is off”, says Ben Marlow in The Daily Telegraph. It has already admitted that “there may be a period where neither of them are running it”, with chief financial officer William Chalmers stepping in as an interim CEO. Still, maybe Lloyds shareholders should be thankful that Horta-Osório isn’t staying on forever. The share price has halved since he took over.

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The delay won’t stop Nunn from having to deal with some potential public-relations disasters next year, says Kalyeena Makortoff and Julia Kollewe in The Guardian. Chief among them is the fallout from a £245m loans scam run from the Reading branch of HBOS, which Lloyds took over in 2009. While six of those involved in the crime have been jailed, Lloyds is “still trying to complete a compensation programme” and is awaiting the results of an inquiry into allegations of a cover-up. Nunn is also likely to face continued criticism over his pay, even though it is lower than Horta-Osório’s package, which prompted “stinging criticism” from MPs.

Good public relations is particularly important given that Lloyds, like other banks, faces a nasty dilemma thanks to the “pile of bad debts” from the various emergency-loan schemes, says Katherine Griffiths in The Times. While the government made it clear that it would guarantee the loans, the terms and conditions require lenders to “try to recover them before they can claim on the guarantees”. But if they push too hard for repayment, they face a “public backlash”. Either way, Nunn can expect “uncomfortable” public appearances before the Treasury select committee and “behind-the-scenes pressure” from ministers about how to treat customers.

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri