The board will form a committee headed by Sir Win Bischoff to hire a replacement, whilst Daniels will stay on until his position is filled.

Daniels’ position as chief executive was controversial. He oversaw the recue buyout of HBOS at the height of the credit crisis, which left Lloyds dependent on a government bailout of £20bn. At the announcement of his resignation in a year’s time, Lloyds shares rose by 1.2%.

“It has been a tremendous honour and a privilege to lead our many talented and dedicated people over the last seven years,” says Daniels.

“I am grateful to have been given the opportunity to create the new Group and to set Lloyds well on its way to becoming the best bank for all our stakeholders including our customers, shareholders and employees.”

Sir Win Bischoff says: “The entire board is grateful to Eric for his leadership as chief executive since June 2003, particularly since the announcement of the acquisition of HBOS in September 2008.

Sponsored

Your First Home: confidence to build

Sponsored by Halifax Intermediaries

“The successful integration of the two companies and the sooner-than-expected return to profitability of the enlarged Lloyds Banking Group are testament to his disciplined and vigorous leadership during a time of unprecedented financial turmoil.

“I have seen first-hand and value greatly the considerable management, banking and organisational expertise Eric has brought to Lloyds Banking Group.”

Daniels is the third senior bank executive to resign in the past month, with HSBC’s Stephen Green and Barclays’ John Varley both stepping down within weeks of each other.