Susan Rice steps down from role as chairman and chief executive of Lloyds TSB

Published on Saturday 21 November 2009 14:16

SUSAN Rice has quit as chairman and chief executive of Lloyds TSB Scotland.

The decision will send shockwaves across the banking sector.

Rice, the country's most senior female banker, announced to the board of Lloyds TSB Scotland on Thursday that she was stepping down. She remains as managing director of parent company Lloyds Banking Group (LBG) in Scotland.

The bank said yesterday Rice's decision comes after news that LTSB Scotland is being sold off to meet European Commission competition requirements. However, sources said she was unhappy with the treatment of its charitable foundation.

At the same board meeting, three non-executives – Julia Ogilvy, John McCormick and James Ferguson – also said they would be leaving LTSB Scotland. Sources claim their resignation was a reaction to Rice's departure. Ferguson is also a trustee of the group's charitable Lloyds TSB Foundation.

Last month it emerged that hundreds of Scottish charities would lose at least 6 million a year in funding with the announcement that the foundation was closing its door to new applications for grants for the foreseeable future.

Since it was established in 1985, almost 85m has been disbursed by the foundation. It operates to a covenant that dictates that the organisation receives a share of 1 per cent of LBG's pre-tax profits per annum. However, the losses predicted by the group mean that there is virtually no money due to the foundation in the coming year, which has forced trustees to close the door to new applications.

Other sources deny Rice's decision is connected to the treatment of the foundation by LBG. An LBG spokesman said: "The changes we have made reflect the need to support Lloyds TSB Scotland throughout the integration of certain operations as a result of the HBOS acquisition and the planned disposal of the business as part of the previously announced state aid restructuring plan which was formally approved by the European Commission this week."

Lloyds rescued HBOS last year and the group is now 43 per cent state-owned.

To replace Rice, Mark Fisher, director of group operations of LBG in Scotland, will become chairman of LTSB Scotland, and Peter Navin, network director of LBG in Scotland, steps up to be chief executive of LTSB Scotland.

Rice will now focus her activities on LBG. She reports to Archie Kane, LBG executive director insurance and group board representative for Scotland.

There have been rumours for years that Eric Daniels, chief executive of LBG, did not see the point of having a separate LTSB Scotland board.

Following the takeover of HBOS, LBG said that Bank of Scotland would be the main brand north of the border and LTSB Scotland would vanish from the high street.

The process has been speeded up by the announcement this month that LTSB Scotland branches, staff, banking licence and TSB brand would be packaged up and sold off within the next four years.

This Thursday, LBG will take its 13.5 billion fundraising plan to shareholders for approval as part of its efforts to side-step the government's toxic asset protection scheme.