Why did James Garvey join Lloyds?

At first glance, James Garvey's incentive to join Lloyds' wholesale banking unit looks fairly straightforward. According to Financial News, Lloyds is paying him 1m a year to run its capital markets business.

However, on second glance, 1m doesn't seem much for a former partner MD and ex-chairman of the debt capital markets business at Goldman Sachs. And nor does Lloyds seem a particularly auspicious place to earn it: it ranks 27th for European DCM for its efforts so far this year according to Dealogic.

Garvey's motivation may therefore be a little more complex. Having apparently left his former employer with most of his stock intact, he still stands to make money from Goldman's rising share price, so a mere 1m (very little of which is alleged to be in cash) may not be financially crippling.

Equally, fixed income headhunters say Lloyds has its advantages as an employer, not least because of its small standing in the market. "Lloyds are like RBS six years ago - they're building their capital markets capability and trying to convert some of their lending relationships into a capital markets business," says one.

Once Garvey's settled in, headhunters predict he will set about recruiting and upgrading the team. Which means mid-ranking and junior DCM people may be given the chance to join Lloyds too.