Lloyds Banking Group PLC's (LYG) focus will return to the vexed topic of its future management later this week as the bank takes a series of steps toward boosting its financial health, including the successful exchange of bonds announced earlier Tuesday.

The 41%-government-owned bank has been in some disarray following the sudden departure of Chief Executive Antonio Horta-Osorio in November due to sickness. The bank has said it expects Horta-Osorio to return to his post in the New Year but has, meanwhile, struggled to find a credible succession plan in case he can't return or the board decides he shouldn't.

The bank initially appointed Finance Director Tim Tookey as interim CEO but only as a short-term measure because Tookey had already said in September that he was leaving in 2012 to become chief financial officer of Friends Life. Lloyds subsequently said non-executive director David Roberts would take over from Tookey as interim CEO if Horta-Osorio doesn't return by January.

The board is widely expected to make its decision at a regular monthly meeting Thursday and at the same time decide on which of two bidders should enter exclusive talks to buy the bank's 632-branch network.

The bidders, bank acquisition vehicle NBNK Investments PLC (NBNK.LN) and The Co-operative Group, have both submitted offers valuing the business at around GBP1.5 billion, although the structure of each bid is likely to be very different.

Lloyds is selling the network as part of a broad disposal program to shed state aid, stabilize profits and meet tough new regulatory capital requirements.

Like its peer, 83%-government owned Royal Bank of Scotland PLC (RBS), Lloyds has also launched auctions for the sale of loan portfolios and in the last few days selected U.S. distressed investor Lone Star as preferred bidder for a GBP1 billion portfolio of commercial property loans.

And earlier Tuesday, the bank announced the final results of its bond exchange offer which analysts estimate will result in a post-tax gain of around GBP522 million and increase its core Tier 1 ration to 10.4% from the current 10.3%.

Debt exchanges, along with other measures, are being adopted by banks across Europe to improve regulatory capital requirements. The mechanism involves financial institutions taking advantage of depressed secondary prices by offering to exchange existing bonds at less than par for new notes. Lloyds offer drew an estimated 63% acceptance level.

-By Marietta Cauchi, Dow Jones Newswires; +44 207 842 9241; marietta.cauchi@dowjones.com

(Serena Ruffoni contributed to this article.)

Nbnk Invest (LSE:NBNK)
Historical Stock Chart
From Jan 2025 to Feb 2025 Click Here for more Nbnk Invest Charts.
Nbnk Invest (LSE:NBNK)
Historical Stock Chart
From Feb 2024 to Feb 2025 Click Here for more Nbnk Invest Charts.