Lloyds Banking Group Plc Chief Executive Antonio Horta-Osorio returned to work after two months' sick leave, facing a potentially even bigger challenge turning around the partly 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 on Monday during a brief photocall outside the bank's head office on Gresham Street in the City of London.
Wearing a dark suit with a bright green tie, he spoke quietly and declined further comment. He made a quick return into the building, watched by staff from windows.
Lloyds has said Horta-Osorio, by his own admission a details-obsessed manager, will change his intensive working style and have fewer people reporting to him than the previous 13. The 47-year-old Portuguese, who took over as CEO in March, had been working on a turnaround strategy including 15,000 job cuts.
Since he went sick, the euro zone debt crisis has worsened and worries have grown about the pace of recovery in Britain, where Lloyds is the biggest retail bank and has more than 30 million customers.
As part of the overhaul, Lloyds is in talks to sell its operations in the United Arab Emirates, with Abu Dhabi Commercial Bank (ADCB) emerging as the favourite to pick up the business, sources told Reuters.
The bank confirmed it is considering options for its Middle Eastern unit, which had assets of 6.1 billion UAE dirhams (1 billion pounds) in 2010 and is covered from its one branch in Dubai.
ADCB, the third largest bank in Abu Dhabi by market value, appears the most likely acquirer of the business as the bank looks to expand its retail banking operations in the Gulf Arab country.
Horta-Osorio said his absence was due to sleep deprivation, which would have taken him to exhaustion if he had not stopped work, but from which he had recovered.
From the moment I stopped (work) and started sleeping I recovered very fast, he told a Portuguese newspaper in an interview published over the weekend.
I probably dedicated myself a tad too much and took things too personally, neglected all rest, and focused totally on the bank, he told Expresso newspaper. I fully understand it when people say that I micromanage.
Horta-Osorio will hold meetings with people from within the bank and from outside over the next few weeks, a spokeswoman for Lloyds said. That is likely to include meetings with leading shareholders.
Lloyds warned it may miss financial targets due to the economic turmoil when it posted a third-quarter loss a week after Horta-Osorio's departure, as earnings are hit by lower margins and higher funding costs.
The bank, 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.
Horta-Osorio also faces being without a finance director for several months. Tim Tookey, who was acting CEO for the past two months, is leaving at the end of next month and his replacement, George Culmer, is unlikely to arrive from insurer RSA until later in the year.
Lloyds shares were down 2.3 percent at 26.5 pence by 3:20 p.m., underperforming a 1.6 percent dip by the European bank sector, and have slumped almost 60 percent since the start of 2011, leaving Britain sitting on a 13 billion pound loss on its 20 billion pound bailout.
(Additional reporting by Stanley Carvalho, Daniel Alvarenga and David French; Writing by Steve Slater; Editing by David Holmes)