Lloyds CFO Culmer to Step Down in Surprise Retirement

(Bloomberg) -- Lloyds Banking Group Plc Chief Financial Officer George Culmer, who helped steer the lender out of state ownership, will unexpectedly step down in the third quarter of next year, and the lender is searching for his replacement.

Key Takeaways

  • The CFO has been a key part of Chief Executive Antonio Horta-Osorio’s drive to cut costs to among the lowest in the European banking industry.
  • Britain’s largest mortgage lender beat pre-tax profit estimates for the third quarter in the absence of misconduct charges that have weighed on earnings over the past few years.
  • The CEO is clamping down on costs, shutting branches and has eliminated jobs as the company invests in digital technology. The lender may consider another share buyback for next year, according to a person close to the bank’s plans.
  • The bank, which is seeking other streams of growth, is expanding through a joint venture in wealth management with Schroders Plc. Lloyds is the majority shareholder of that venture. The wealth management arm of Lloyds is also the smallest business at the lender.

Market Reaction

  • Lloyds shares are down about 16 percent this year, and are flat in early morning trade in London.
  • Culmer’s departure is a “loss to the firm,” Citigroup Inc. analysts said in a note after the third quarter results, adding that the lender is beating expectations on containing costs.