Sir Win Bischoff, the former chairman of the US megabank Citigroup, is to become chairman of Lloyds Banking Group when the incumbent, Sir Victor Blank, steps down in September.
Sir Win had been widely tipped for the role, which pays an annual salary of £700,000 but no bonus entitlement, although Lloyds stressed yesterday that it had considered more than 50 candidates before making the appointment. Lloyds has been searching for a new chairman since Sir Victor was forced earlier this year to announce his departure, having come under pressure from shareholders following the bank's takeover of its rival Halifax Bank of Scotland. That deal culminated in a government rescue for the combined entity which saw the taxpayer take a 43 per cent stake in Lloyds.
Sir Win spent much of his career with Schroders, the London-based fund management business, which was bought by Citigroup nine years ago. He became chairman of the US bank's European operation, and then chairman of the whole bank in 2007 as the credit crisis began to bite, a role he relinquished earlier this year.
Despite Citigroup's struggles during the crisis, Sir Win's management was widely regarded, though there is likely to be some criticism of his appointment at Lloyds given his close involvement with a bank so closely associated with the crunch.
Nevertheless, Sir Win's arrival at Lloyds reflects strong backing from UK Financial Investments, the body through which the Government holds its stake in the bank.
Sir Win is likely to face immediate questions over the future of Eric Daniels, the chief executive of Lloyds, with some investors continuing to wonder why he has not paid the same price for the HBOS debacle as Sir Victor. Another challenge is likely to come from Brussels, where European Commission officials have made it clear they will closely scrutinise banks that have been bailed out by their governments.
The HBOS takeover leaves Lloyds well-placed, in the long term at least, in the UK's domestic banking market, but the EU competition commissioner, Neelie Kroes, has hinted she might push for the break-up of banking groups with strong competitive advantages boosted by taxpayer support.