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Lloyds bank boss to retire next year

The chief executive of the Lloyds Banking Group, Eric Daniels, is to retire in a year's time.

He becomes the third senior bank executive to step down in the past few weeks, following John Varley at Barclays, and Stephen Green at HSBC.

Mr Daniels oversaw Lloyds' heavily-criticised rescue takeover of the Hbos banking group in 2008.

The deal, during the banking crisis, undermined the finances of Lloyds and prompted a government bail out.

The-then Labour government took a large minority stake - which currently stands at 41% - in Lloyds.

That cost the government £20bn.

Lloyds Banking Group returned to profit in the first half of the year, mainly because of a drop in the amount set aside to cover bad loans.

Pre-tax profits were £1.6bn, compared with a loss of £4bn in the same period a year earlier.

Before that the bank lost £13bn in the course of 2008 and 2009.

Much of that was due to the huge losses that had been built up in the Hbos bank that went undetected by Lloyds before its takeover.
'Grateful'

Mr Daniels, 59, will continue in his post until next year when a replacement is appointed.

Lloyds chairman Sir Win Bischoff said: "The entire board and I are grateful to Eric for his leadership as chief executive since June 2003, particularly since the announcement of the acquisition of Hbos in September 2008.

"The successful integration of the two companies and the sooner-than-expected return to profitability of the enlarged Lloyds Banking Group are testament to his disciplined and vigorous leadership during a time of unprecedented financial turmoil."

Aggrieved shareholders in Lloyds Banking Group are preparing legal action to recover up to £14bn they say they lost as a result of Lloyds' rescue of Hbos.

They allege that the former Chancellor Alistair Darling and Lloyds directors hid vital information from shareholders in the run-up to the takeover.

In particular they claim that Lloyds and the government hid the fact that Hbos had just been given an emergency £25bn loan by the Bank of England to keep it afloat.

BBC News

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