The board of Lloyds Banking Group
The board has got a process in place to assess Antonio's health and whether he can return to work, said the source.
Lloyds, which is 40 percent owned by the British government after a bailout during the 2008 credit crisis, shocked investors last month by saying that 47-year-old Horta-Osorio was taking a break due to stress-related illness, leaving a potential power vacuum.
The source added that Lloyds had an independent medical expert working on the situation and that the bank was in regular contact with UKFI - the government body managing Britain's stake in the bank - and the Treasury over the matter.
The assessments are also due to include a series of meetings between Horta-Osorio and various members of Lloyds' board.
They would like to be able to make a decision before Christmas, added the source.
BACK-UP IN PLACE IF CEO DOES NOT RETURN
Lloyds has already set up various back-up plans should Horta-Osorio not return to his post, with several analysts and investors having already expressed their belief that Horta-Osorio may have to give up his job.
Last month, the bank said David Roberts, a 49-year-old non-executive director and former Barclays
The bank also appointed George Culmer from insurer Royal & Sun Alliance
Lloyds' current finance director Tim Tookey has been acting as caretaker CEO during Horta-Osorio's illness but Tookey was already due to leave Lloyds for insurer Resolution
Horta-Osorio's illness has come at a difficult moment for Lloyds.
Under Horta-Osorio, Lloyds has embarked on a major restructuring that entails 15,000 job cuts and a retreat from many overseas operations. Lloyds also has to dispose of some 630 retail bank branches in a deal known as Project Verde.
Britain finished up with a 40 percent stake in Lloyds and 83 percent of Royal Bank of Scotland
(Reporting by Sudip Kar-Gupta; Editing by Hans-Juergen Peters)