* Bischoff will step down by May 2014
* Says performance of group "well on track"
* Anthony Watson to lead search for replacement
* BoE deputy governor Tucker linked with post
By Matt Scuffham
LONDON, May 13 Lloyds Banking Group Plc
Chairman Win Bischoff is to retire in the next year, handing the
reins to a successor who must steer it through a potentially
risky multi-billion pound government share sale.
Bischoff, 72, has overseen a restructuring and return to
profitability at Lloyds, rescued by the government through a 20
billion pound ($31 billion) bailout during the 2008 financial
crisis which left Britain with a 39 percent stake.
His replacement will need a mix of stock market nous and
political sensitivity, given the high-profile nature of the
looming privatisation and British Finance Minister George
Osbourne's need to maximise returns to help fix the nation's
Industry and political sources have said the government is
keen to start selling off shares in the bank ahead of the 2015
general election and the new chairman will be tasked with
handling the potentially delicate political process.
Shares in Lloyds have been edging closer to the 61 pence
level which the government regards as its break-even and last
week hit a two-year high of 59.1p, raising hopes Britain could
soon start selling its shares, which have a stock market value
of some 17 billion pounds.
That prospect means the bank's new chairman will need to
quickly establish strong relationships with Osbourne and with UK
Financial Investments (UKFI), which manages the government's
The new chairman will also take charge at a time when Lloyds
is planning to float 630 branches after the collapse of a
planned sale to the Co-operative, in a divestment
ordered by the European Commission as a price of accepting the
NO-ONE RULED IN OR OUT
Bank of England deputy governor Paul Tucker, who had been
favourite to succeed Mervyn King as governor of the central bank
but lost out to Canadian Mark Carney, has been linked with the
role in some British newspapers.
However, a source familiar with the matter played down the
reports and said no individual had been ruled in or out. The
bank is likely to examine the credentials of both internal and
external candidates in a process expected to take months.
The Treasury and UKFI are expected to have a say in the
process. Lloyds, the Treasury and the Bank of England declined
The bank said on Monday that Anthony Watson, its senior
independent director, would lead the search.
Lloyds said Bischoff would retire no later than next year's
annual shareholders' meeting in May 2014. The exact date will be
subject to the appointment of his successor.
Bischoff said Lloyds had made significant progress towards
its goal of becoming a strong UK-focused retail and commercial
bank. "Whilst clearly some challenges remain, the performance of
the group is well on track. Indeed, in many areas, it is ahead
of plan," he said in a statement.
Bischoff spent his career at Schroders before its
investment banking arm was acquired by Citigroup in 2000.
He became chairman of Citi until stepping down in 2009 and
joined Lloyds shortly afterwards.
At Lloyds, he oversaw the appointment of Portuguese banker
Antonio Horta-Osorio as chief executive in 2009, following the
departure of Eric Daniels.
Shares in Lloyds were down 2.4 percent to 57.5 pence at 1100
GMT, underperforming the European Banking sector which
was down 1.9 percent.
Bischoff will chair the bank's 2013 annual shareholders'
meeting on Thursday in Edinburgh, Scotland.