January 9, 2012 / 12:35 PM / in 6 years

Lloyds boss thrilled at return, faces tough revival task

LONDON, Jan 9 (Reuters) - Lloyds Banking Group Chief Executive Antonio Horta-Osorio said he was “thrilled” to return to work on Monday after a two-month absence due to fatigue, but faces an even bigger challenge turning around the part-state-owned lender than when he left.

“I am thrilled to be back and I look forward to working with my colleagues again,” Horta-Osorio said during a brief photocall outside the bank’s head office on Gresham Street in the City of London.

Horta-Osorio, wearing a dark suit with a bright green tie, spoke quietly and declined further comment. He made a quick return into the building, watched by some staff from windows interested in his re-appearance.

Lloyds has said Horta-Osorio will change his intensive working style and will have fewer people reporting to him than the previous 13. He was known as a details-obsessed chief.

But the 47-year-old Portuguese only took over as CEO in March and needs to implement a far-reaching turnaround strategy he unveiled, including 15,000 job cuts.

He arguably faces an even tougher task than when he left, following a deterioration in the euro zone debt crisis and worries about the pace of recovery in Britain, where Lloyds is the biggest retail bank and has more than 30 million customers.

The bank said it may miss financial targets due to the economic turmoil when it posted a third-quarter loss a week after Horta-Osorio’s departure.

Its earnings are under pressure from lower margins and higher funding costs and Lloyds said it may not meet some of its medium-term income targets until after 2014.

Lloyds, already saddled with tens of billions of pounds of losses from its takeover of troubled rival HBOS at the height of the 2008 crisis, could report another loss this year, analysts at Barclays Capital estimate.

It could notch up another 20 billion pounds in bad debts as the fragile economy sees credit quality deteriorate again, especially for mortgages, the analysts said.

Lloyds shares were down 0.4 percent at 27 pence by 1230 GMT in a FTSE 100 index which was down 0.2 percent, and have slumped almost 60 percent since the start of 2011, leaving UK taxpayers sitting on a 13 billion pound ($20 billion) loss on their 20 billion pound bailout.

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