LLOYDS Banking Group has tempted Nathan Bostock away from arch-rival Royal Bank of Scotland with a promotion, The Herald understands.

Neither of the two state-backed banks would comment last night on reports that Mr Bostock, who has played a key role in RBS chief executive Stephen Hester’s radical restructuring of the Edinburgh-headquartered institution, was poised to move.

However, it is believed Mr Bostock’s appointment as head of Bank of Scotland owner Lloyds’ wholesale division could be confirmed in a statement to the stock market as early as this morning.

It is understood Mr Bostock’s impending departure from RBS is amicable, and he will remain with the bank for several months.

The post at Lloyds is a promotion for Mr Bostock.

It is understood there were no such openings at RBS, and it was an ambition of Mr Bostock to have responsibility for running a big division of a major bank with its own profit and loss account.

Lloyds’ wholesale division serves more than one million businesses, ranging from start-ups and small enterprises to global corporations.

The division comprises corporate markets, treasury and trading, and asset finance.

Mr Bostock will replace Truett Tate as head of Lloyds’ wholesale business. It is believed Mr Tate will take up a non-executive role on Lloyds’ board, with the title of vice-chairman.

António Horta-Osório, former head of Spanish bank Santander’s UK business, has been ringing the changes at Lloyds since becoming chief executive on March 1 this year.

Mr Bostock joined RBS on June 1, 2009 as head of restructuring and risk, with responsibility for the newly formed non-core division and the bank’s participation in the UK Government’s asset protection scheme (APS), the global restructuring group, and the control functions of group legal and secretariat and risk management.

The non-core division holds assets that will be wound down or sold to reduce the size and improve the risk profile of the RBS balance sheet and is responsible for the management of assets covered by the APS.

RBS is about halfway through a five-year restructuring programme which began in January 2009.

It remains to be seen whether, and to what extent, Lloyds compensates Mr Bostock for share-based rewards he will have to relinquish on leaving RBS.