Erikka Askeland: Daniels may be leaving Lloyds on the rise but it's from a low point

SO FAREWELL then, Eric Daniels. The so-called "quiet man" who swallowed HBOS yesterday confirmed the long-standing rumour he is stepping down as chief executive of Lloyds Banking Group in a year's time.

His departure could hardly be called an untimely defenestration. By the time the Marlboro smoker starts collecting his pension he will be a respectable 60 years old, having run the business for eight years - which is a long tooth in the world of chief executives.

Anyone who thought investor ire was driving him out will be sorely mistaken.

The bank's chairman Sir Win Bischoff said Daniels could be credited with the "successful" integration of the two banks and the "sooner than expected" return to profitability. But most Lloyds' shareholders would probably have preferred the bank stayed profitable in the first place and avoided the debacle "saving" HBOS created.

So what will Daniels get, having presided over a 95 per cent share price collapse? OK, so Lloyds shares are now recovered to about a quarter of what they were worth in February 2007, but the prospect of dividends is still a long way off.

As he is retiring, he won't get a "golden goodbye". And friends of Daniels point out that his 192k-per-year pension pot is a pittance compared to that of Sir Fred (Goodwin). Albeit the final terms of his remuneration won't be made until February.

Any shareholders who might have views on the size of Daniels' pension relative to their reduction in lifestyle due to the collapse in the value of their investment in the bank can write to the current chair of the bank's remuneration committee, Tony Watson. And they might be banging on an open door. Watson replaced previous remuneration committee member Wolfgang Berndt, who was rumoured to have been shown the door by UKFI when he agreed Daniels' last bonus of 2.3m.Watson may take a harder line, but no-one expects Daniels to starve.

Of course, HBOS shareholders may eventually be grateful for the fact that although their stake was diluted, 77p (last night's closing price) is a far sight better than a big fat nought, which they would have got if Lloyds hadn't soaked up its billions of losses.

Obviously Daniels and the board were mistaken to trust promises made by Gordon Brown et al, that the "merger" with HBOS would not ruffle the feathers of European competition commissioner, but the bank director who paid the price of his job for that gaffe was chairman Sir Victor Blank.

George Osborne's review of banking, led by Sir John Vickers, may propose to shave off some of its market share but, really, I doubt if its teeth will be so sharp come springtime when the report is due.

By avoiding the safety net of the government's multi-billion bank insurance scheme, Daniels managed to limit the damage the European Competition rules wreaked on Royal Bank of Scotland. RBS has had to put up for sale more than 300 branches and a host of other businesses including its insurance arm and is still 84 per cent owned by the taxpayer. Lloyds still has to sell 600 branches and reduce its share of the retail market to 30 per cent. But it is only 41 per cent owned by the taxpayer and banking analysts are starting to warm to it, suggesting shares are on their way up.

He may be reviled by shareholders and hated by the tens of thousands of employees who lost their jobs in his "efficiencies".

Only time will tell if Daniels, who throughout has insisted the merger would create the biggest and best retail bank in the UK, was right.

Ephemera behind the league status of our twin cities

DID you feel a small bump yesterday? That may have been Edinburgh landing as it dropped from 28 to 31 on the ranking of global financial services centres. Or if there was a certain giddiness in Glasgow, that might have been the feeling of that city's elevation to 46 from 52nd place.

Edinburgh can blame the likes of Sir Fred Goodwin and Andy Hornby for its shame, while Glasgow can thank the likes of Barclays for sticking with it and boosting its fortunes. But we could also take such things with a grain of salt.

The Z/Yen Group's "Global Financial Centres Index" mark eight (GFCI8), is indeed an instructive way of looking at influence in global financial services. But the report has - or at least its methodology has - been likened to the X-Factor in terms of its authority. Part of the assessment is based on votes relying on a touchy-feely view of a place from people working in financial services around the globe.

Now it could be argued perception - or reputation - plays a lot when it comes to money, or where people like to invest or manage money. But these are also ephemeral and shifting.The winner's of Simon Cowell's X-Factor may get the Christmas number one on the charts then turn up on late-night adverts selling deodorant a year later, or worse. Such is fashion.