A Lloyds TSB spokesperson said: "Andrew Longhurst was group director of customer finance. That role no longer exists".
The colourful Mr Longhurst, regarded as one of the leading figures in the UK mortgage industry, was a casualty of Lloyds' decision to "focus on customer relationships".
One analyst commented: "I was a bit stunned to see the golden-haired boy leaving. Whether he decided to leave or whether it was decided for him I just don't know."
"It seems strange that there is no longer room on the Lloyds board for the man synonymous with Cheltenham & Gloucester", added another source.
Mr Longhurst has been associated with C&G for more than 30 years. Lloyds was yesterday keen to dispel rumours that Mr Longhurst had been "edged out". "Mr Longhurst fully supports the reorganisation", said a spokesperson.
Some of Mr Longhurst's responsibilities, in particular on the mortgage side, will fall to Michael Fairey, 49, who was yesterday appointed deputy chief executive and tipped as an eventual successor to Peter Ellwood, the current chief executive.
Gordon Pell, currently director of distribution, will also take up some of Mr Longhurst's workload. Mr Pell is to join the board and take responsibility for a newly created UK retail banking division.
Mr Longhurst was yesterday unavailable for comment. His successor at the head of the C&G will be announced "shortly".