The head of Santander’s UK business is to become the next chief executive of Lloyds Banking Group.

Following the announcement by outgoing chief executive Eric Daniels that he would step down next year, the UK’s largest retail banking group announced on 3 November that António Horta-Osório would be his replacement.

In a short statement, Lloyds said António Horta-Osório, who has overseen the expansion of Santander in the UK through takeovers of Abbey, Alliance and part of Bradford & Bingley, will join the group in early 2011. He will become group chief executive in March.

The announcement came a day after Lloyds published its financial results for the third quarter of 2010. The group announced it was on track to achieve its objectives, delivering ‘good underlying income growth’ and the continuing decline of impairments – funds set aside for bad debts.

The Lloyds share price fell off the back of the results publication but in trading in the morning on 3 November the price climbed by 3.43 per cent, following the announcement of Hórta-Osório’s appointment.

Lloyds said the amount it was setting aside for bad debts was likely to be in line with its ‘recent guidance’ and it had made good progress on increasing its capital and was well-positioned to meet new regulatory requirements.

Out-going chief executive Eric Daniels said: “Core income growth, margin improvement, integration savings, funding progress and balance sheet reduction all remain on target, giving us confidence that we will deliver a good financial performance of the current financial year.”

© Fair Investment Company Ltd