Lloyds' banking chief set to step down

Mr Daniels – who has come under fire following the bank's troubled rescue of HBOS at the height of the financial crisis – will step down after leading the group as chief executive since June 2003.

Lloyds, 41 per cent owned by the taxpayer, said it will launch a search internally and externally for his successor. Lloyds did not give a date for his departure, but said he aimed to leave in a year's time.

Mr Daniels, 59, will continue in the post until a replacement is appointed, it added. The American's planned departure will mark a clean sweep at the top of the UK's major banks since the sector meltdown in 2008 and ends mounting speculation over his position at the helm.

Lloyds chairman Sir Win Bischoff paid tribute to Mr Daniels on announcing the move. He said: "The entire board and I are grateful to Eric for his leadership as chief executive since June 2003, particularly since the announcement of the acquisition of HBOS in September 2008."

Mr Daniels said it had been "a tremendous honour" to head the retail banking giant.

Shares closed up 2.1p to 77.4p, a rise of 2.7 per cent.