UPDATE 3-UK bank Lloyds shakes up management structure

* CEO Horta-Osorio cuts number of direct reports to 10 vs 14

* Truett Tate, ally of former CEO Daniels, to retire

* Four of 10 direct reports are ex-Santander, 2 open positions

By Sudip Kar-Gupta

LONDON, Feb 1 (Reuters) - British bank Lloyds , part state-owned, has streamlined its management structure to help take pressure off its chief executive, who recently had two months off work due to fatigue.

Antonio Horta-Osorio, who returned to work three weeks ago, will now have 10 executives reporting to him through five business lines, down from 14 previously.

"The move is not a surprise. They are looking to reduce the pressure on the CEO," Shore Capital analyst Gary Greenwood said.

Only two of the 10 direct reports have been at Lloyds longer than 13 months. The bank still needs to hire for two of the positions, and does not know when its finance director will arrive.

Alison Brittain becomes group director for retail banking, while Antonio Lorenzo is to run the asset finance division along with the group strategy and international and wealth management arms.

Wholesale banking chief Truett Tate, a key stalwart of former CEO Eric Daniels, will retire from the group, continuing a shake-out of the previous management team since Horta-Osorio took over last year. Lloyds is looking for a replacement.

Horta-Osorio, poached from rival Santander UK, has brought over key former Santander allies, including Brittain and Lorenzo. Four of his 10 direct reports are former Santander bankers.

GAPS TO BE PLUGGED

Lloyds shares were up 2.8 percent at 31.48 pence by 1000 GMT, half the 63 pence average price at which the government bought its stake, leaving the taxpayer sitting on an 11 billion pound loss on its 20 billion bailout.

It is also still hoping to formalise the arrival of George Culmer, who will take over from finance chief Tim Tookey.

"The changes to the group's senior management team ensure we have the right organisational structure to deliver on our strategy and move to the next phase of the group's transformation," Horta-Osorio said.

Britain owns around 40 percent of Lloyds and 83 percent of rival Royal Bank of Scotland after bailing out both banks during the 2008 credit crisis.

Last year, Horta-Osorio set out a restructuring plan that would see Lloyds axe 15,000 jobs and halve its international presence.

He hopes the restructuring will save 1.5 billion pounds ($2.4 billion)a year and restore the bank's fortunes.