Lloyds TSB said on Thursday it expected annual savings of “significantly in excess of £1bn” from its £12.2bn takeover of HBOS by 2011, but said it had yet to decide on how many job losses would be involved among the combined bank’s 140,000 staff.

The UK government confirmed it would use public interest grounds to push the deal through in order to “ensure the stability of the UK financial system”, but Eric Daniels, Lloyds’ chief executive, said the merger had been struck on commercial terms and was not merely a government-brokered rescue of HBOS.