SIR VICTOR BLANK, chairman of Lloyds TSB, which last week announced a £12 billion takeover of HBOS, has set out his ambitions to turn the combined group into a top 10 international bank within five years.

Blank and his chief executive Eric Daniels intend to use the strength of the enlarged bank to expand into continental Europe and other areas.

The world’s ninth and tenth-biggest banks are Spain’s Santander, which is capitalised at $101 billion (£55 billion) and France’s BNP Paribas which has a market value of $89 billion.

The combination of Lloyds and HBOS will be valued at $52 billion. This will rank it at 23rd in the world league.

However, Blank cautioned that the overseas expansion would only take place once Lloyds had integrated the acquisition, and this could take up to three years.

Blank said: “I have always felt that Daniels and his team have run this bank well, but it has always been valued as a utility rather than a growth bank. Here there is a good chance to break out of that straitjacket.”

He added: “We have seized an opportunity, but we will manage it through carefully and it will give us a platform to grow overseas. That is the vision, but first we have to deliver on this combination.”

Andy Hornby, chief executive of HBOS, has been offered a position in the merged group and this could involve him running the British banking operations.

It is possible that the name of the company will be Lloyds Group and the HBOS name will be ditched. However, all the subsidiary operations from Halifax to Cheltenham & Gloucester would be kept.

Blank said that no final decision had yet been taken on the matter. Investors in HBOS will be offered 44% of the enlarged company.

Blank said the most likely place to make an acquisition would be continental Europe. But he added: “I would not commit to that being the only place.”

The level of savings from putting the two operations together is expected to be well over £1 billion. This would come from reducing the headcount and merging the back-office functions.

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