Lloyds has named Charlie Nunn, a senior banker at rival HSBC, as its next chief executive

  • Lloyds Bank named Charlie Nunn, head of wealth and personal banking at rival HSBC, as its next CEO on Monday.
  • Current Lloyds boss Antonio Horta-Osorio is stepping down in 2021 after a decade at the bank.
  • Nunn may not take up his new job for almost a year from now, because of his notice period and other restrictions. If Horta-Osorio leaves first, CFO William Chalmers could step in as interim CEO, Lloyds said.
  • Nunn has agreed to a lower pay package than his predecessor, with his potential pay set at around £5 million ($6.7 million).
  • Visit Business Insider’s homepage for more stories.

Britain’s biggest domestic lender Lloyds Banking Group has named Charlie Nunn, currently head of wealth and personal banking at rival HSBC, as its next chief executive.

Nunn will replace long-standing Lloyds boss Antonio Horta-Osorio, who in July said he would step down in 2021 after a decade at the helm.

Nunn will be charged with steering Lloyds, seen as a bellwether for Britain’s economy, through the fallout from the COVID-19 pandemic and an era of rock-bottom central bank interest rates.

Despite taking hefty provisions against potential loan losses this year, analysts say Lloyds, like its rivals, faces further pain as government support for jobs and businesses is withdrawn next year.

Shares in Lloyds, which said earlier this month it is cutting more than 1,000 jobs, are down 40% this year, although they have rallied a third since the start of November following news of breakthroughs in the race to find a vaccine against COVID-19.

Lloyds shares gained 1% on Monday.

Read more:Challenger banks are hot on the heels of legacy players. Here’s how they’re looking to grab market share as consumers lean into digital banking.

Analysts welcomed the appointment but noted Nunn may not take up his new job for almost a year, after Lloyds said he was subject to a six-month notice period and a further six months of restrictions.

“It does mean that Lloyds will be without a CEO as they start a critical 2021 where a fundamental shift in strategy is clearly necessary to address the markedly lower revenue given the unexpectedly low interest rate environment,” analysts at KBW said in a note.

CFO William Chalmers would become acting CEO if Horta-Osorio left the bank before Nunn joins, Lloyds said.

“We see this as a strong appointment, likely leading to a major strategic evolution at Lloyds which we see as necessary,” Goodbody analyst Colin Jackson said in a note.

Nunn, a former McKinsey and Accenture consultant, who joined HSBC in 2011, was appointed to his current role in February following a management reshuffle by CEO Noel Quinn.

At HSBC, colleagues said he was known for his structured approach and for a focus on upgrading digital capabilities. He emerged in February as one of the winners of HSBC’s latest executive reshuffle, taking over the bank’s newly combined wealth and personal banking divisions.

HSBC said in a separate memo that Nuno Matos, currently head of its non-ringfenced British arm, is to replace Nunn.

Pay cut

At Lloyds, Nunn will receive a lower pay package than his predecessor. Lloyds said he had agreed to lower bonuses than the policy allowed, reducing his maximum potential pay by 20%.

This would limit his pay to around £5 million ($6.7 million), compared with the £6.3 million ($8.4 million) limit calculated by investor advisory group ISS for Horta-Osorio.

Incoming chairman Robin Budenberg has also asked for his pay package to be cut by 20%, Lloyds said.

Read more:The 5 highest-paid CEOs in the financial services industry an earned average of $27.9 million each in 2019. Meet the CEOs from Morgan Stanley, JPMorgan Chase, Bank of America, Citigroup, and Goldman Sachs

Lloyds’ pay policy for senior executives has faced long-running criticism. One third of balloted shareholders voted against the bank’s pay policy at its investor meeting in May.

Nunn will receive a basic annual salary and a fixed share award of £1.1 million ($1.50 million) each, in addition to flexible benefit funding of 4% of basic salary, Lloyds said in a statement.

His pension has been set at 15% of his salary.

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