Lloyds Banking Group plc’s (LON:LLOY) chief executive has bought £36,000 of shares as a gesture of support despite rumours he is searching for a new job now that the bank has returned to private ownership.
The lender said in a filing today that Antonio Horta-Osorio bought 50,000 shares at 72.31p yesterday when the group announced the government had sold its remaining stake in the bank.
Horta-Osorio held 36,370,757 shares worth £18.2mln at 21 February 2017, according to the company’s annual report.
Lloyds said the Treasury received £900mln more than the £20.5bn it paid for a 43% stake when it rescued the bank during the 2008-09 financial crisis.
The news sent the share price rising more than 3% yesterday.
Former shareholders accuse Lloyds of gloating....
But a group of former shareholders suing Lloyds over its takeover of HBOS accused the bank of gloating over its return to private ownership while they are still heavily out of pocket.
The Lloyds Shareholder Action Group, which represents 6,000 investors, are suing the bank for £450mln over claims Lloyds mislead them on the £12bn HBOS deal in 2008.
“It is disgraceful that the government is gloating about making a profit from selling its stake in Lloyds,” the group said.
HBOS and Lloyds had both already been bailed out by the government in 2008. But the government had to inject a further £5.7bn in taxpayer funding in 2009 as HBOS’s finances turned out to be worse than previously thought, causing investors to suffer huge losses.
Lloyds is also wrestling with a fraud case at its HBOS Reading branch. The bank has set aside a £100mln provision to reimburse victims of fraud at HBOS's Reading branch, in which struggling businesses suffered big losses before Lloyds bought the lender. Six people were jailed, including two former HBOS employees, earlier this year for the fraud.
Lloyds has also racked up a £17.4bn bill to cover claims for mis-sold payment protection insurance and faces another £82mln hit in compensation for investors who were mis-sold investment products.
Lloyds chairman signals Horta-Osorio is staying put...
With misconduct and legal troubles still in tow, Chairman Lord Blackwell has signalled that Horta-Osorio is not going anywhere as there is plenty of work left to be done.
In an interview with The Telegraph, Blackwell said: “There’s no sense from Antonio that the job is done. He’s working hard on the strategy for creating the bank of the future, and he’s as excited as I am about the prospects for that.”
Horta-Osorio has insisted he was “very happy at Lloyds” amid speculation that he intends to move on after nursing the bank back to health and overseeing its return to privatisation.
He has been tipped as possible replacement for HSBC’s outgoing chief executive Stuart Gulliver, who departs next year.
However, Blackwell said Horta-Osorio has been tasked with building Lloyds into a “great British institution”, which he believes could be achieved over a five-year period.
“That aspiration….is an ambition that motivates all of us, Antonio included,” he told the newspaper.
When asked what skills a replacement for Horta-Osorio would need to have, Blackwell added: “That’s a hypothetical question at the moment.”