"When I got here, the bank was a time bomb," says António Horta-Osório, chief executive of Lloyds Banking Group. "We had £700 billion of banking assets and £300 billion of wholesale funding, half of which was short-term with an average tenor of two months." He pauses and reflects. "The bank was in danger of going bankrupt."
Aside from all the challenges of cleaning out a toxic loan book, Lloyds was faced with the height of the eurozone crisis, which meant there was a real risk of the short-term money markets closing.
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That was in January 2011, when Horta-Osório joined Lloyds as its chief executive. Lloyds was, by anyone’s standards, a mess. Its ill-conceived takeover of HBOS during the financial crisis, led by former chairman Victor Blank and CEO Eric Daniels, had turned what was once the most admired bank in the UK into a pariah that had been forced to take a bailout from the UK government, which now owned almost half of the bank. But even in those bleak days, just how bad a situation the bank was in was not widely known.