SIR WIN Bischoff will succeed Sir Victor Blank as chairman of Lloyds Banking Group, the bank announced yesterday, prompting criticism from some quarters. <br /><br />Bischoff, former chairman of Citigroup, will be paid £700,000 a year without shares or a bonus and will assume the role on 15 September, long before next year’s annual meeting, the deadline given by Blank for his departure. <br /><br />Blank announced that he would step down in May, following criticism of Lloyds’ takeover of troubled lender HBOS, which completed in January. <br /><br />But Lloyds chief executive Eric Daniels, who has also been criticised for the HBOS deal, looks set to keep his job. <br /><br />“It’s important you make sure the execution goes forward and from all I know Eric is the right person to supervise that execution,” Bischoff said. <br /><br />Asked if he would review Daniels’ position, he said: “I don’t think that’s my first priority.”<br /><br />The takeover of HBOS has saddled Lloyds with billions of pounds of losses from the former’s risky loan book, forcing the government to provide billions in rescue funds.<br /><br />Within minutes of the announcement, critics expressed dismay at the appointment. Bischoff was a key executive at Citi in the bubble years and was therefore partly responsible for the decisions that eventually led to its part-nationalisation, critics said. <br /><br />He first joined Citi as European chairman in 2000 before becoming group chairman in 2007, a position he held until February 2009.<br /><br />The bank has taken a $45bn (£27.3bn) bailout under the US Tarp scheme, amid criticism that its board, including Bischoff, had failed to rein in chief executives Chuck Prince and then Vikram Pandit. <br /><br />Matthew Sinclair, research director at the Taxpayers’ Alliance, said: “Taxpayers aren’t going to feel their money is secure if the man overseeing it has overseen disaster at another bank so recently.” <br /><br />The government approved his appointment due to its 43 per cent stake in the bank, managed via UK Financial Investments.<br /><br />Justin Urquhart-Stewart of Seven Investment Management said the bank was wrong if it thought it had secured a “safe pair of hands”, adding that shareholders would be unenthusiastic about the appointment.<br /><br />But some institutional investors said Bischoff was the right man to handle negotiations with the government, especially if the competition authorities put pressure on the bank to break itself up due to its dominant position in the UK market. <br /><br />Although Bischoff has a five year term, he said he could stand down earlier if the conditions were right. <br /><br />The City veteran, 67, faces an uphill struggle. UBS predicts Lloyds will report a half-year loss of £6bn. Lloyds has said it could be loss-making in 2009 and 2010, largely as a result of the commercial property loan book it inherited from HBOS.<br /><br />Blank is entitled to a £200,000 payout but will give the sum to charity.