LONDON: Lloyds Banking Group's finance director, Tim Tookey, is to quit the partly state-owned British bank to join insurer Friends Life, continuing a series of high-profile management departures since the arrival of new chief executive Antonio Horta-Osorio at the beginning of the year.
Lloyds said on Monday that Tookey would remain with the company until the end of February next year and that it had already begun looking for his successor.
Tookey's decision to leave follows that of former Lloyds retail banking head Helen Weir and insurance head Archie Kane.
Analysts at brokerages Canaccord Genuity, Oriel Securities and Espirito Santo all said that Horta-Osorio might now promote his former colleague at Santander UK , Nathan Bostock, to replace Tookey.
Lloyds had poached Bostock from rival Royal Bank of Scotland in July to head up its wholesale banking arm after Horta-Osorio joined from Santander UK to replace Eric Daniels as chief executive.
"Nathan Bostock would certainly have the capabilities to be a CFO," said Espirito Santo analyst Joseph Dickerson.
Lloyds shares fell 6 percent to 33.56 pence in early morning trade.
Analysts and investors said the stock's decline had more to do with broader market concerns over the global economy than with Tookey's departure, with the European banking index down 2.8 percent, but added that the resignation was still a "small negative" factor.
"I think it's always disappointing when you get changes at the main board level, but one hopes that the appointment of a successor will be a positive," said Cavendish Asset Management fund manager Paul Mumford, who owns 6.34 million Lloyds shares.
"A new pair of hands could be quite refreshing," he added.
'NO RIFT WITH CEO'
On a conference call with Friends Life management, Tookey denied media reports that he had decided to leave Lloyds after falling out with Horta-Osorio.
"There's been absolutely no disagreement on strategy between Antonio and I at Lloyds. I've greatly enjoyed developing the strategy with Antonio and bringing it to the market at the end of June, and I've enjoyed being part of the team that's now focused on delivering it," he said.
Since taking over at Lloyds Horta-Osorio has announced plans to axe 15,000 jobs and to halve Lloyds' international presence, which the company hopes will save it 1.5 billion pounds a year by 2014.
Lloyds has been dogged by a legacy of bad debts from its government-brokered acquisition of troubled rival HBOS during the credit crisis, and its shares have consistently traded well below the 63.1 pence average price at which the British taxpayer acquired its stake in the bank.
The British government has a stake of roughly 41 percent in Lloyds and holds 83 percent of rival Royal Bank of Scotland after it had to bail out both banks with taxpayers' money during the credit crisis.
European competition regulators have ordered both banks to sell off assets to compensate for their state bail-outs, and Lloyds is currently in the process of looking to sell some 630 retail bank branches. .
INSURANCE CALLING
Tookey already has experience of working in the insurance industry, having been a finance director at British insurer Prudential before joining Lloyds in 2006.
Friends Life, which is a division of British insurance vehicle Resolution, said hiring Tookey would help it in its plans to return cash to investors.
"We do expect further consolidation in the UK life sector and we wanted a CFO with significant transaction and capital markets experience. Tim clearly has that," Friends Life's chief executive Andy Briggs told reporters on a conference call.
Resolution was set up three years ago by entrepreneur Clive Cowdery to acquire and restructure struggling life insurance companies, and in August it said that its half-year profit had more than doubled to 390 million pounds ($616 million).
Copyright Reuters, 2011
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