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Business Profile: Eric Daniels

Quiet American is breathing a little easier as Lloyds returns to profit

Tuesday 27 April 2010 19:00 EDT
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Eric Daniels is the Marlboro Lights-smoking chief executive of Lloyds Banking Group who was breathing a bit easier yesterday after he said the bank had returned to profit. He also felt confident enough to forecast that the Black Horse won't be going into the red for the rest of the year. At least as long as the economy remains healthy.

The quietly spoken 58-year-old – who is the antithesis of the brash American banker – is a graduate of Cornell University and took over a company that had been disappointing for years. Lloyds had been sharply criticised for buying the life insurer Scottish Widows at the top of the market and then failing to integrate the company.

While predecessor Peter Ellwood had attempted to buy Abbey National and then searched fruitlessly for overseas deals, Mr Daniels changed direction, saying he would focus on organic growth. He sold off foreign operations – such as National Bank of New Zealand and the company's Latin American businesses – while keeping hold of Widows and focusing on maintaining the bank's substantial dividend.

Mr Daniels took some serious heat for his troubles, with critics arguing that his conservative, safety-first strategy was preventing the bank from capitalising on growth opportunities. However, all that changed with the advent of the financial crisis when it looked like Mr Daniels and Lloyds would emerge as big winners.

Until, that is, under government pressure, the bank agreed to rescue rival HBoS. Mr Daniels insists that the deal was "a good one" but most analysts agree that it is HBoS that is largely responsible for the bank having to call on £20bn of state funds and Mr Daniels' potential £6.2m package is causing ructions among shareholders.

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