Sir Win said Lloyds was well placed for the long term
Lloyds Banking Group has appointed Sir Win Bischoff, the former chairman of Citigroup, as its new chairman.
Sir Win, 68, will replace current chairman Sir Victor Blank in September.
Sir Victor announced in May that he was standing down. He had come under fire for overseeing Lloyds' takeover of HBOS last year.
Lloyds, which is 43%-owned by the taxpayer, said it consulted with the body set up to manage the government's bank stakes before appointing Sir Win.
Bad debts at HBOS - the scale of which was not apparent when the takeover was agreed - have meant Lloyds has already warned shareholders it will make a group loss this year.
Many in the City have focused on huge loan write-offs and the prospect of rising bad debt charges, despite the company insisting the tie-up - which had been encouraged by the government as a way of saving struggling HBOS - will have long-term benefits.
"Short-term we face many challenges but, in the longer term, the group is well-positioned to deliver significant benefits to its customers, shareholders, employees and the public," said Sir Win, who was widely tipped to get the job.
Lloyds' chief executive, Eric Daniels, said that Sir Win would bring "great knowledge and insight" to the group.
Meanwhile Sir Victor praised his successor as having "a wealth of senior banking experience which will be very valuable to the group in the future as the two banks are integrated to create the success the board envisages".
Lloyds has announced more than 8,000 job cuts so far this year, including the closure of all Cheltenham & Gloucester branches.