The appointment brings to an end weeks of speculation internally within HBOS as to who would be head of mortgages within the new enlarged group.
Joy Griffiths, managing director of mortgages at Lloyds TSB, was also rumoured to be one of the other candidates though to have been considered for the position.
She has instead been made managing director of the community bank and will be in charge of all the Lloyds TSB branded branches within the Lloyds Banking Group.
Watkins was previously chief executive of retail products at HBOS, with responsibility for the design and manufacture of retail products in the UK, as well as marketing, e-commerce and operations for HBOS’ retail division.
Born in 1962, he graduated from Oxford in 1985 with a degree in politics, philosophy and economics.
He worked in the City for Morgan Grenfell before joining Birmingham Midshires in 1993 where he worked in risk management and became treasurer in 1996.
After a number of senior roles within Birmingham Midshires, he became managing director in September 2001 and joined the retail board.
He led Birmingham Midshires through a period of significant change and growth, as it became part of the HBOS group.
In January 2005 Watkins became head of retail risk. He was appointed to the position of group risk director, becoming a member of HBOS’ executive committee, in March 2006.
He was appointed to the board of HBOS on September 5 2007.