HSBC executive Nunn to succeed Horta-Osorio as new Lloyds boss

The bank outlines salary, bonus and pension awards that the new chief executive will secure once he takes over in 2021.

People walk past a branch of Lloyds Bank on Oxford Street in London, Britain July 28, 2016. REUTERS/Peter Nicholls/File Photo GLOBAL BUSINESS WEEK AHEAD PACKAGE - SEARCH 'BUSINESS WEEK AHEAD 24 OCT' FOR ALL IMAGES
Image: Lloyds is the UK's largest mortgage lender
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HSBC's high street banking boss is to become the new chief executive of Lloyds Banking Group - the UK's largest mortgage lender.

Lloyds said it had picked Charlie Nunn, currently head of wealth and personal banking at rival HSBC, to succeed Antonio Horta-Osorio when he steps down next year after a decade at the helm.

The date is yet to be fixed but Mr Nunn's current contract has a six-month notice period and a non-compete clause of the same duration - barriers that would be expected to be brought down following negotiations between the banks.

Charlie Nunn will take over at Lloyds in 2021
Image: Charlie Nunn will take over at Lloyds in 2021

He will take charge at a time of turmoil for the UK economy arising from challenges posed by the coronavirus crisis and the potential for additional disruption caused by Brexit when the transition period concludes at the year's end.

Lloyds, like rivals, has booked provisions worth billions of pounds for expected loan losses at a time when interest rates are at rock bottom levels - pressuring profitability.

A boom in demand for mortgages was credited for a better-than-expected profit performance in the third quarter of the year.

Lloyds - and Mr Nunn himself - moved to avert the prospect of a row over pension awards that riled investors earlier this year after regulators had banned the payment of dividends to bank shareholders.

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The bank faced a backlash despite a pledge by the bank that no executive directors and executive committee members would be considered for bonuses.

Lloyds said on Tuesday that changes to Mr Nunn's salary and maximum long-term share plan meant his maximum pay would be around 20% lower than that of Mr Horta-Osorio.

Antonio Horta-Osorio, Group Chief Executive Lloyds Banking Group, addresses the Institute of Directors convention at the Royal Albert Hall, London. 6/10/2015
Image: Antonio Horta-Osorio took over in the wake of the financial crisis

It explained that he had waived the chance of getting long-term bonuses worth up to 400% of his salary - opting instead to only receive a maximum of 150%.

Pension contributions will be set at 15% - down from the 33% level which attracted the backlash against his predecessor.

Shares - down 40% this year - fell another 4.5% on Monday after news of the appointment.

Mr Nunn said: "I feel particularly lucky to be joining Lloyds Banking Group at this important time.

"Lloyds' history, exceptional people and leading position in the UK means it is uniquely placed to define the future of exceptional customer service in UK financial services.

"I look forward to building on the work of Antonio and the team and their commitment to helping Britain prosper."