Updated from 12:01 p.m. EDT
Lloyds Banking Group
announced Sunday that Chairman Sir Victor Blank is planning to retire from his position by June 2010.
The announcement comes as Blank continues to face criticism for Lloyds' decision to purchase HBOS bank, a deal that was pushed by the U.K. government.
In a press release announcing Blank's decision, Lloyds said its board had appointed The Lord Leitch as deputy chairman, to take effect immediately. Leitch also becomes Lloyds' senior nonexecutive director at next month's annual meeting.
In the press release, Blank said he would continue to work until a successor is appointed. He also defended the HBOS acquisition, saying, "This remains -- in the medium term -- a unique value-enhancing opportunity."
Although Blank says the HBOS deal should pay off over time, the acquisition of the struggling bank, which earlier this year reported an annual loss of about $11.37 billion, forced Lloyds to seek a bailout, and the U.K. government now holds more than 43% of its shares.
Eric Daniels, Lloyds' CEO, has also come under criticism after he told a parliamentary committee that the board didn't have enough time to properly inspect HBOS' books before agreeing to the deal, London's
noted. The newspaper added that Blank's resignation should lift the "immediate pressure" on Daniels.
The Lord Leitch said in the press release that Lloyds' board unanimously wanted Blank to seek re-election as chairman for another three years at next month's annual meeting. "We are very sad about Sir Victor's personal decision to retire, although we respect and understand his reasons for it," Leitch said.
But Blank's decision to announcement his retirement now avoids the "potentially embarassing" situation that would have occurred if shareholders had staged a protest vote against his re-election at next month's annual meeting, the
Shares of Lloyds Banking Group finished New York trading Friday down 11 cents at $5.37.
This article was written by a staff member of TheStreet.com.