The chief executive of Lloyds Banking Group has indicated that the British government had changed its view on the bank’s capital ratios, as he defended the decision to seek state protection over £260bn of assets.

Eric Daniels said the government had in recent months changed its view of the amount of capital banks should hold. “Whereas before, the posture was that capital ratios could drift down towards the regulatory minima if conditions worsened, the thinking is now that capital should be thought about as if in a severe stress,” he told analysts and investors.