Lloyds TSB has hired only one executive from HBOS, owner of Halifax and Bank of Scotland, to join the new board of the merged bank. Sir Victor Blank, chairman of Lloyds TSB and Eric Daniels, the bank's chief executive, will retain their positions on the board of the combined lender. However, only Harry Baines, company secretary at HBOS, will serve as part of the new management line-up.

Andy Horby, chief executive of HBOS, and Dennis Stevenson, its chairman, are not named as members of the new board. The other four, including Archie Kane, who will represent the new board in Scotland, are all Lloyds TSB executives. Mr Kane, who heads Scottish Widows, will also be head of insurance in the enlarged company. But Mr Daniels has also created a new wealth and international division, which will be run at a level just below the board by Jo Dawson, an HBOS executive in charge of insurance and investment, which included representing HBOS on the board of its majority-owned wealth manager St James's Place.

Mr Daniels said: "I believe we have significant growth potential in this area," a signal that he has no intention of selling the 59 per cent stake in St James's Place. Otherwise, the three other current key executives at Lloyds TSB — Helen Weir, head of UK retail, Truett Tate, head of wholesale, and Tim Tookey, the acting finance director — will take the same role at the merged group. There are doubts over whether the Lloyds TSB takeover of HBOS will go ahead, even on the latest reduced offer of 0.605 Lloyds shares for every HBOS share.

In recent days HBOS's price has risen more than that of Lloyds, narrowing the discount to the offer but which still stands at around 19 per cent. Under the Government's £37 billion plan to bail out the British banking system, HBOS and Lloyds TSB will be lent £17 billion but only on condition that the two banks merge.