The first chief executive of merged financial giant Halifax Bank of Scotland (HBOS) has announced plans to quit the group in the summer.

James Crosby, who became chief executive of Halifax in 1999, and led it into a tie-up with Bank of Scotland in 2001, said it was the right time for "someone else to take HBOS forward".

The change, which has been the subject of speculation in recent weeks, will see chief operating officer Andy Hornby step into Mr Crosby's job.

Edinburgh-based HBOS said Mr Hornby would take over with effect from July 31, when Mr Crosby will leave the group. In the meantime, the pair will work together to "ensure an orderly handover", the company added.

It has also recruited Benny Higgins from rival Royal Bank of Scotland to take a boardroom role as the group's new head of retail banking. He joined RBS in 1997 and has been chief executive of retail banking for the past seven years, leading the integration of NatWest's high street arm during that time.

The move by Mr Crosby comes after a strong start to life for HBOS, which has doubled profits since the merger and achieved a surplus of £4.59bn in 2004. It is expected to post a figure of £4.8bn for 2005.

Mr Crosby said: "Good succession planning is the key to sustaining strong business performance. After more than seven years as chief executive, I believe the time is right for someone else to take HBOS forward. In appointing Andy the board has chosen the best man for the job."

HBOS chairman Dennis Stevenson said: "James has had a major impact. Under his leadership, the size and reach of the group has been transformed."