Anthony Hilton: Lloyds leak helps bank save face

Previously the company had indicated that he was expected to return in the New Year.

It looks like an exercise in damage limitation. Firstly, the story only appeared in a handful of newspapers. This suggests a deliberate plant. Secondly, there was no official confirmation of the piece, so the company can maintain its public line that he is expected to return in the New Year. But it nevertheless buys the group time to address a couple of very real problems.

The first of these is that several of Lloyds' biggest shareholders, the investing institutions, have made it clear to the bank's board that their confidence in the chief executive has been badly shaken by his illness.

The company has clearly struggled to find someone to do the job on an interim basis - handing it first to the financial director who was already working out his notice, and then to one of its non-executives.

The other problem is that the senior ranks of Lloyds are themselves split. There is huge sympathy for the chief executive, but the director's job is to put the interests of the company first. Hence the face-saving formula - leaked to the FT - that he will be interviewed by each of the directors so they can all be satisfied as to his fitness to return, and the headline that he has to reapply for his job.

It is a great strategy until you actually think about it. The individuals on the board have no ability at all to assess whether or not he has made a lasting recovery. This is a job for highly qualified medical specialists and even they will be unable to give 100 per cent assurance.

That of course was what was always going to happen, so actually it does not take us any further forward. But as a PR strategy it has defused the issue and taken the heat off the company and provided 'cover' for his return. Not a bad result from one leak.

Anthony Hilton is City commentator on London's Evening Standard

This article was first published on prweek.com