Lloyds Banking Group PLC (LON:LLOY) has poached rival HSBC PLC’s (LON:HSBA) wealth and personal banking boss, Charlie Nunn, to be its new chief executive.
Current CEO Antonio Horta-Osorio is due to step down next June, the FTSE 100-listed lender said earlier this year, while chairman Lord Blackwell is being replaced by non-executive director Robin Budenberg in January.
Nunn, who joined HSBC in 2011 after two decades at consultancies Accenture and McKinsey & Co and has headed up several divisions at the Asia-focused lender before being given his current role in 2018, may not be able to start in the new role for a year.
While he has a six-month notice period and there is also a non-compete clause of another six months, the two banks could agree to a shorter hiatus.
In the event that Nunn cannot start for another 12 months, Lloyds said chief financial officer William Chalmers will step in as acting CEO to fill the gap.
Lloyds said its new boss’s salary and incentive plan meant his maximum pay would be around 20% lower than Horta-Osorio’s after Nunn waived the chance of getting long-term bonuses worth up to 400% of his salary, with a maximum of 150% set instead.
Operational and technology expertise
Budenberg, who was part of the board committee that managed the selection process, said in the statement that he was “excited about Charlie’s vision for Lloyds Banking Group“.
The chairman-elect added: “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.”
Nunn said Lloyds was “uniquely placed to define the future of exceptional customer service in UK financial services”.
Horta-Osorio will have completed a decade in charge when he leaves, in which time he has delivered three strategic plans and returned the bank to the dividend list for the first time since the financial crisis.
Alongside the group’s full year results in February, Lloyds is expected to unveil another three-year strategic plan.
“Although Mr Nunn is unlikely to have started his new role at this point, one might assume that he will have already been briefed on and bought into any new targets,” said broker Shore Capital.
“While these will no doubt be subsequently be fine-tuned once he arrives, we do not anticipate a significant change in strategic direction for the group, at least in the near-term.”
Investors were not quite sure what to make of the new appointment, with the shares falling then rising before falling to 36.94p by early afternoon, down 1% on the day and 41% lower than at the start of the year.
Nunn’s appointment, said analysts at AJ Bell, is “fraught with some complication given his notice period and other restrictions – Lloyds needs the transition to be as smooth as possible given the rough waters it is entering”.
They added that while Horta-Osorio was leading Lloyds out of a crisis, Nunn will be leading the company as it heads straight into one, with the full impact of the coronavirus pandemic and Brexit on the economy yet to fully hit.
“As unemployment mounts, the company is likely to see pressure on its credit book and while the PPI scandal is the rear-view mirror, Nunn will still face an ultra-low interest rate environment and a tough regulatory backdrop.”
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