National Australia Bank has appointed Ms Lynne Peacock to head its European operations, which includes National Irish Bank and Northern Bank.

Ms Peacock replaces Mr Ross Pinney, who is moving back to Australia to work with NAB chief executive Mr John Stewart. The senior management changes were announced in a statement to the stock exchange in Australia yesterday.

Ms Peacock had previously worked with Mr Stewart at Barclay's Bank and worked as NAB's executive general manager of people and culture and has implemented new initiatives aimed at improving the culture and governance processes at the bank. In a statement Mr Stewart, said Ms Peacock's considerable knowledge of the UK market made her "exceptionally qualified" for this new role.

Within NAB the head of European operations is considered to be the second most powerful position next to Mr Stewart's. Ms Peacock's main focus is expected to be the integration of its two UK banks, the Yorkshire and Clydesdale. She is expected also to have a role in finalising the sale of NIB and Northern Bank.

NAB is considering a number of expressions of interest from financial institutions to acquire both banks. Halifax Bank of Scotland, which owns Bank of Scotland Ireland, is viewed as being the favourite to acquire the two banks.

A deal is expected to be concluded in the coming weeks with investors expecting Mr Stewart to comment on the future of NIB and Northern Bank when he presents NAB's results on November 10th.

Bank of Scotland Ireland has plans to expand its presence in Ireland by moving into retail banking and could build its franchise quickly by acquiring the two banks which have been valued at around €1.2 billion.

HBoS has refused to comment on the speculation linking it to a bid. It already has a substantial call centre and software development centre in Northern Ireland where the information technology centre for both banks is based.

NAB is being advised by Lazard which has circulated an information memorandum to financial institutions considering this potential acquisition. The bank favours selling the two banks together.

Lloyds TSB has also been mentioned as having expressed an interest in acquiring the banks although informed sources suggest that HBoS is likely to emerge as the owner of NIB and Northern Bank.

It would be expected to drop the NIB brand and to offer its retail services under the Bank of Scotland name. HBoS would almost certainly retain Northern Bank's brand in Northern Ireland where it is a substantial player.