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Lloyds Boss Pledges Future To Bank In Wake Of Affair Claims

The chief executive of Britain’s biggest high street bank will on Wednesday break his silence a fortnight after allegations about his private life sparked anxiety over his long-term commitment to the role.

Sky News has learnt that Antonio Horta-Osorio will circulate a memo to Lloyds Banking Group (Other OTC: LLOBF - news) 's 75,000 employees in which he will express "deep regret" for any embarrassment that an alleged extramarital affair had caused to the company reputation.

In his first remarks to staff following revelations about his relationship with Wendy Piatt, a senior academic, Mr Horta-Osorio is expected to pledge his determination to steer Lloyds through a turbulent period for the British banking sector.

Mr Horta-Osorio will say that while interest rates are likely to remain lower for longer, he is determined to deliver a strategy outlined in 2014 which will cement its recovery from a £20.5bn taxpayer bailout in 2008.

His comments will be accompanied by a staunch defence of his track record at the bank, with £16bn having been returned to British taxpayers through a string of profitable share sales since 2013.

Lloyds has also resumed paying dividends, even as it has been forced to absorb more than £16bn in costs for the mis-selling of payment protection insurance prior to Mr Horta-Osorio's arrival at the bank.

He has also taken the axe to tens of thousands of jobs, and said last month that it would cut another 3,000 roles and an additional 200 branches by the end of next year.

Mr Horta-Osorio is held in high regard by Lloyds shareholders - which continue to include the Government - and his memo this week is likely to reassure them that he is not considering stepping down in the near future, despite the awkwardness of the claims about his private life.

One leading Lloyds shareholder quoted anonymously by Reuters earlier this month was reported to have said: "It [succession planning] is definitely something the board should be thinking hard about.

"It's a concern allied to the fact that the job for the next couple of years is going to be harder than he thought now."

Insiders said that the Portuguese boss had written to colleagues on Lloyds' executive committee shortly after The Sun newspaper published its story on his relationship with Ms Piatt.

His note said that his expenses had been entirely proper, but included an apology for any reputational damage.

Mr Horta-Osorio and Ms Piatt were photographed together during a working visit to Singapore, alongside suggestions that his expenditure during a stay at an upmarket hotel warranted further scrutiny.

But both the Lloyds boss and the bank said that his expenses claims had been reviewed and been found to have been filed entirely in accordance with company policy.

One ally of the Lloyds chief said an inquiry into his expenses claims had concluded "beyond any doubt" that there had been no impropriety, adding that Mr Horta-Osorio had paid for personal expenditure during the Singapore trip using a separate credit card.

While Lloyds had expressed its support for Mr Horta-Osorio, the chief executive himself has yet to make a public comment about the situation.

The Lloyds chief has now returned from a holiday with his family, and is said by friends to have decided that it was appropriate to express his regret to the bank's entire workforce.

Friends of Mr Horta-Osorio said on Tuesday that he had been "disappointed" that a "private family matter" had been exposed in public, but acknowledged that as the head of a major public company such scrutiny is inevitable.

"He is realistic about things, and wants to carry on delivering for Lloyds staff, shareholders and taxpayers," one said.

The Government continues to hold roughly 9% of Lloyds' shares, with the new Chancellor, Philip Hammond, expected to decide shortly whether to honour a commitment made by George Osborne, his predecessor, to sell the bulk of that stake through an offer to retail investors.

Lloyds declined to comment on Tuesday evening.