Investors woke on Monday to the surprise news that the chief executives of two of the UK’s biggest financial firms, insurer Aviva (AV.) and Lloyds Bank (LLOY), were stepping down.
In the case of Aviva, Maurice Tulloch, who was only appointed just over a year ago, is stepping down with immediate effect due to family health reasons.
His replacement, Amanda Blanc, is currently an independent non-executive director and chair of the Customer, Conduct and Reputation board committee, but was formerly chief executive of Axa UK and Ireland, chief executive for Europe at Zurich Insurance and chair of the Association of British Insurers (ABI), and therefore brings a wealth of experience.
NEW BROOM
Tulloch started at Aviva in 1992, joining the board in 2017 and taking the top job in March 2019. His decision late last year to reject a board-backed plan to simplify the business by splitting out the general insurance unit, either listing it separately or selling it to a rival, disappointed investors.
In contrast, rival Legal & General (LGEN) sold its general insurance division to Germany’s Allianz last year while Prudential (PRU) split itself into several units, de-merging and listing its wealth management arm M&G (MNG) and its Asian business. Prudential also has plans to float its US business this year.
Investors responded positively to today’s news, marking Aviva shares up 5% to 287p on hopes that Blanc will make changes.
‘We will look at all our strategic opportunities, and at pace. I have been on the Aviva board since the start of this year and have a good understanding of where the business has its strengths and what actions we should take across our portfolio’, said the new CEO.
DOUBLE DEPARTURE
Meanwhile Lloyds Bank announced that current chief executive Antonio Horta-Osorio would step down next June after 10 years in the role.
Until then, Horta-Osorio will be ‘completely focused with the executive team on delivering the remainder of the current strategic plan (GSR3), as well as the plans put in place to address the Covid 19 pandemic effects and support our customers during these difficult times.’
As well as the chief executive, Lloyds is swapping chairmen with ex investment banker Robin Budenberg taking over from Lord Blackwell early next year.
From 2009, former Warburg/UBS veteran Budenberg was chief executive then chairman of UK Financial Investments, the government body responsible for managing the taxpayers’ stakes in UK banks, including Lloyds, so he has a good top-down view of the business.
In the decade since Horta-Osorio became chief executive, Lloyds share price has pretty much halved so investors will be hoping that whoever takes over the role has a plan to reboot the bank and recover some of that lost value. Shares ticked up 1.6% to 31.5p.
