March 28 (Bloomberg) -- Lloyds TSB Group Plc, the U.K.'s biggest provider of checking accounts, said consumer-banking head Terri Dial will leave after almost three years at the bank. She will join Citigroup Inc., a person close to the U.S. company confirmed.

Dial, 58, will stay on ``for a period to ensure an orderly transition of her duties,'' London-based Lloyds TSB said in a statement today. The bank said it has started a search for her successor.

Dial's appointment as U.S. consumer head at Citigroup, the biggest U.S. bank by assets, was reported earlier today by the Wall Street Journal. She's replacing Steven Freiberg, who will run Citigroup's global credit-card business, the newspaper said. Citigroup spokesman Adrian Russell declined to comment.

Lloyds TSB Chief Executive Officer Eric Daniels hired Dial from San Francisco-based Wells Fargo & Co. in 2005 to help lift revenue. The U.K. division increased pretax profit 20 percent in the second half of 2007 as the economy weakened by controlling costs, increasing mortgage lending and attracting more deposits.

``This is a loss for Lloyds,'' said Mamoun Tazi, an analyst at MF Global Securities Ltd. in London. ``Dial has done a terrific job streamlining the business, focusing on new sales and keeping a lid on costs'' said Tazi, who has a ``buy'' rating on the stock.

Lloyds TSB's fell 1.8 percent to 451.25 pence in London, valuing the bank at 25.8 billion pounds ($51.4 billion).

``Terri has made a tremendous contribution to the Lloyds TSB Group and we wish her well in her future endeavors,'' Daniels said in the statement. ``I have great confidence in our ability to continue with our strong growth momentum.''

Global Consumer Head

Dial, who pushed fee-based checking accounts and sales of insurance and savings products at Lloyds TSB, will focus on reviving the U.S. bank's retail-banking and consumer-finance operations in its home market, the Journal reported.

Dial worked for 28 years at Wells Fargo, the fifth-largest U.S. bank, before stepping down in 2001. Daniels, the first American to run Lloyds TSB, spent 25 years at Citigroup and joined Lloyds TSB in 2001 as retail head, becoming CEO in 2003.

``Lloyds TSB's retail division has good prospects in 2008 with or without Terri Dial,'' Ian Gordon, a London-based analyst at Exane BNP Paribas, said in a research note to clients today. ``It is capable of maintaining positive momentum across the group despite operational and regulatory headwinds,'' said Gordon, who has an ``underperform'' rating on the stock.

Beating Peers

Lloyds TSB, with overall profit in the second half of 2007 increasing 10 percent to 1.75 billion pounds, was one of the few U.K. banks to increase earnings. Profit fell 8.9 percent in the period at HBOS Plc, the U.K.'s biggest mortgage lender, and dropped 21 percent at Barclays Plc, the U.K.'s third-biggest bank.

Lloyds TSB posted a 12 percent increase in customer deposits last year and said loan margins improved as it maintained a mortgage market share of about 8 percent.

To contact the reporter on this story: Ben Livesey in London blivesey@bloomberg.net

Last Updated: March 28, 2008 14:01 EDT