HBOS has frozen the accounts of Andy Hornby, its chief executive, after a thief stole his identification details and withdrew thousands of pounds in cash.
Mr Hornby, who earned £1.7m last year, is said to have been told the news while on holiday.
Fraud investigators are now poring over Mr Hornby's accounts to work out how much money has been stolen.
The thief is believed to have obtained one of Mr Hornby's bank statements and used it to pose as the 41-year-old chief, stealing up to £7,000 in one day.
The fraudster is said to have been filmed on CCTV withdrawing cash from bank branches and from an ATM machine.
The embarrassing episode adds to a gruelling year for Mr Hornby, who has had to face shareholder unrest since HBOS launched a £4bn rights issue in April. It is not known for how long the fraudster had access to the accounts before staff became aware of the theft.
The good news for Mr Hornby is that he will probably be eligible for a refund from HBOS. The bank said that, like all lenders, it will generally reimburse customers who are victims of fraud if they have taken sufficient care to safeguard their details. Banks advise their customers to shred financial documents and to keep those that are not shredded in a safe place.
HBOS declined to discuss Mr Hornby's case, saying that the bank never commented on an individual customer's affairs.
Mr Hornby is the second UK bank boss to fall victim to fraud so far this year.
Marcus Agius, the chairman of Barclays, had £10,000 stolen from his account in January by an identity thief who obtained a credit card in his name. Financial fraud has rocketed in recent years as criminals target bank customers' personal data.
The Financial Services Authority has highlighted such fraud as a key threat to the financial industry and has told banks to increase vigilance.
Mr Hornby became HBOS chief executive two years ago. He has spent the past year dealing with the effects on the industry of the credit crunch and the economic slowdown.
The Oxford-educated former management consultant joined Halifax from Asda in 1999 as head of retail banking and stayed in that job after the country's biggest mortgage lender merged with Bank of Scotland in 2001.
As the rising star of UK retail banking, he was awarded £2.2m in shares by HBOS in 2002 to stop him from joining Boots as chief executive.Reuse content