HBOS appeared to be on a collision course with Parliament yesterday after the Commons Treasury Select Committee said that it would investigate any secret payments to the bank’s departing directors.

The possibility of a clash arose after Lloyds TSB announced that only two of HBOS’s eight top executives would join its senior management after Lloyds’s £6.2 billion rescue takeover of its smaller rival. Generous severance payments to HBOS executives would make a mockery of the Government’s crackdown on payments for failure.

Taxpayers are set to own up to 43.5 per cent of the combined Lloyds-HBOS after the banks said that they would raise £17 billion in extra capital under the Treasury’s £500 billion banks bailout. HBOS refused to comment on whether six executives, who missed out on top jobs at Lloyds, would receive severance pay if they do not move to lower-profile positions in the enlarged bank.

Five of the six are contractually entitled to an estimated £2.7 million combined payoff if they lose their jobs as a result of the takeover. HBOS also declined to comment on whether it would make any payments public.

Andy Hornby, HBOS’s chief executive, and Lord Stevenson, its chairman, have agreed to forgo their golden good-byes when they leave the troubled bank. No HBOS directors will receive a bonus this year. An HBOS spokesman said: “The senior management team remains firmly in place. Their focus is on completing this deal and running the business as usual.”

Michael Fallon, deputy chairman of the Treasury Select Committee, said that the prospect of secret payoffs was scandalous. He said: “The public have a right to know about rewards for failure. We’d expect any package to be disclosed and if they’re not, we have the power to require that they are.”

Once the deal is completed, the committee is expected to force HBOS’s executives to appear at a series of hearings to investigate the bank’s downfall. Both banks promised when announcing their deal that there would be “no rewards for failure”, and the Chancellor said that the Treasury’s bailout cash was tied to conditions covering executive pay and dividend policies.

Lloyds said that Jo Dawson, HBOS’s chief executive of insurance, investment and retail distribution, would join its executive committee – one step below the board – in a newly created role of wealth and international director.

Harry Baines, HBOS’s company secretary and group counsel, will take the same role in Lloyds when the takeover is completed in January. All other board and executive committee jobs in the combined group will be filled by existing Lloyds executives.

Mike Ellis, HBOS’s finance director, Colin Matthew, its treasury head, and Peter Cummings, chief executive of HBOS’s corporate business, are not expected to join Lloyds. Mr Matthew, who joined the bank aged 16, has for the past year overseen some of the high-risk investments that lost HBOS £1 billion in the first half of the year.

Mr Cummings, who also joined HBOS aged 16, was the mastermind behind HBOS’s expansion into property, lending about £40 billion to property companies and taking stakes in others, leaving the high street bank exposed to the housebuilding crash.

Eric Daniels, Lloyds’s chief executive, said that there had been a lengthy interview process. “We looked for the individual who’d be the best fit for the combined entity, [not] at the origin of the person,” he said.

Lloyds TSB’s shares rose 10.2 per cent to 197.5p yesterday, valuing its offer for HBOS at about 119.4p a share. HBOS shares were trading at a 21 per cent discount to the offer at 94p.

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