THERE could be no Scottish representative on the board of Lloyds Banking Group, owner of Bank of Scotland, in future after it announced the departure of Lord Sandy Leitch, the chairman of Scottish Widows and group deputy chairman.
Lloyds, which acquired Halifax Bank of Scotland in a controversial rescue deal three years ago, said Lord Leitch will be replaced as group deputy chairman by board colleague Glen Moreno when he leaves at the end of the year.
The bank is also looking for another chairman for its Edinburgh-based insurance arm Scottish Widows, but Lloyds made no commitment to appointing a director to formally represent its Scottish business, which employs 20,000 people. A decision will only take place once chairman Sir Win Bischoff has conducted a review.
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Lord Leitch, who was last year paid more than £300,000 for his part-time services to Lloyds, has been the board representative for Scotland since March.
He inherited the brief from Archie Kane, who was executive director for Lloyds’s insurance business until his departure in a reshuffle by new chief executive Antonio Horta-Osorio.
High-level representation for Lloyds’s interests north of the Border was a key part of the bank’s efforts to calm fears about the importance of Scotland within the group following the takeover of Edinburgh-based HBOS.
Mr Kane had been a key figure in this campaign, chairing a new Scottish executive committee and representing the Scottish operations at board level.
When he left, Philip Grant, managing director of UK private banking at Lloyds, became chairman of the Scottish executive committee, without holding a seat on the full company board.
Lord Leitch represented Scotland at board level.
Margo MacDonald, independent MSP for the Lothians, said Lloyds should ensure that it retains a Scottish representative at board level following Lord Leitch’s departure.
“There are still so many people employed (by Lloyds) in Scotland,” she said. “Everybody will be watching this like a hawk.”
Lloyds said Lord Leitch will retire at the end of 2011, after six years on its board, “due to increasing time pressure from his other business commitments”.
He is chairman of health insurer Bupa, which is seeking a new chief executive after incumbent Ray King recently announced his departure.
Sir Win said: “As chairman of one of our largest businesses, Scottish Widows Group, his background in insurance and finance and his association with Scotland have proved to be invaluable.”
He said that Lord Leitch will act as an adviser on insurance and Scottish matters during 2012.
Lord Leitch said: “These past years have witnessed incredible challenge and profound change in the banking industry generally and specifically for Lloyds Banking Group.
“My own view is that we have turned a corner and real progress is being made.”
Meanwhile, Lloyds said finance director Tim Tookey has also quit to join insurer Friends Life as chief financial officer.
Mr Tookey, who was paid £1.6m last year, said: “This has been an important period for the group and I am pleased to have played a part in defining the next stage of the strategy which I fully endorse as the right one to realise the group’s potential.”
Mr Tookey, who has been with the group since 2006, will leave at the end of February after preparing the bank’s accounts for 2011. He will not get a pay-off.
Former Royal Bank of Scotland executive Nathan Bostock, who is joining to head up the bank’s wholesale arm, and Antonio Lorenzo, who worked with Mr Horta-Osorio at Santander before following him to Lloyds, have been touted as possible replacements.
The board changes seemed to unsettle investors, with Lloyds’s shares closing down 2.39p, or 6.7%, at 33.415p.
Meanwhile, John Hourican, chief executive of Royal Bank of Scotland’s investment banking arm, global banking and markets, has netted £272,000 by selling 1.1 million bank shares. The shares were part of his 2010 bonus which will vest in three annual tranches to 2013.