The Financial Times reported on Friday that the chief executive of Lloyds Banking Group has suggested that it may take up to five years for the part-nationalised bank to turn around.
“This bank will be built over time; it is a three to five year journey”, said Antonio Horta-Osorio in an interview suggesting the bank would not set out a full five year plan when it meets for a strategic review at the end of this month.
Lloyds had announced last month that it will set aside £3.2 billion to compensate people for the bank’s mis-sold Payment Protection Insurance products.
The bank has suffered a total loss of £3.5 billion in the first quarter of 2011 on account of Ireland’s economic woes and PPI charges.
“It is fair to say some of the problems were more intense”, said Horta-Osorio. “It will be very clear what the shape of the business will be in the future and how we expect to get there. But I have only been here three months, I will not be setting out a full five-year plan”, he added.
Lloyds had accepted the government’s bailout package during the financial crisis and is currently 41 percent owned by British tax-payers.
As a condition of bail-out package, European regulators had ordered the bank to sell-off 600 branches to mobilise funds. British banking regulators had indicated that the bank may have to sell more branches to boost competition.
The UK government is expected to exit the investment and sell the stakes at a future date.