Mr Gardner becomes regional managing director for commercial banking, adding SMEs to his existing role leading the Scottish midmarket business which supports companies with a turnover of £15 million to £750m.
Mr Gardner joined Bank of Scotland in 1987 and has a strong background in commercial and corporate banking, with previous roles heading up the oil and gas industry team, as well as establishing an acquisition finance team for the group.
Based at the group's Scottish headquarters at The Mound, Mr Gardner will report jointly to UK directors Tim Porter and Mark Stokes.
Mr Porter said: "Alasdair has a comprehensive understanding of the Scottish business community and I am delighted he is taking on the additional responsibility of managing our SME business."
Mr Stokes said the widened remit would see Mr Gardner "play a key role on the group's Scottish executive committee" .
Mr Gardner said: "It is an exciting time to be working with companies across Scotland and I am delighted to be able to play such an important role.
"Lloyds Banking Group lent £1.8 billion to Scottish businesses in the first nine months of last year and it is clear confidence is slowly beginning to return to the economy.
"I am looking forward to taking on this extended role as we seek to give businesses the confidence they need to grow and bring prosperity to the Scottish economy."
Speaking to The Herald last August, Mr Gardner said the bank had re-energised its credit management centre and its credit function , with over 90% of credit decisions made in Scotland.
He said: "The challenge for bankers is to rebuild the image of the profession. These issues just don't help any bank in its engagement with its client base, and they are not helpful for UK plc, which needs a strong banking industry to support it."
On criticisms of banks' attitude on the ground to lending, he said: "There are very few sectors where we would have limited appetite, the key to us is the strength and capability of the management team. The big operational change is to encourage our teams to spend more time with our client to really understand his strategy, particularly in the corporate space."