MUSICAL chairs at the part-nationalised banks has continued after Royal Bank of Scotland revealed retail head Brian Hartzer has quit while Lloyds's stand-in chief Tim Tookey told MPs the bank's directors have discussed its management issues with the body overseeing the taxpayer's stake.

Meanwhile HSBC's Scots-born chairman Douglas Flint denied "holding a gun" to the Government's head by postponing a decision on whether to move overseas.

Mr Hartzer, who joined RBS in 2009, is taking a senior role in an Australian institution but is expected to stay with the Edinburgh bank until summer 2012.

Stephen Hester, chief executive of 83% state-owned RBS, said: "He will leave the UK retail business in good health and with time to conduct an orderly succession."

One possible replacement is Nathan Bostock, the bank's chief risk officer, who quit for a business-facing role as head of wholesale at Lloyds but unexpectedly backed out of the switch this week. However, he has not previously held a senior retail banking job.

Mr Bostock's volte-face came days after Lloyds chief executive Antonio Horta-Osorio took a fatigue-related sickness absence earlier this month leaving Tim Tookey, its finance director who is moving to Friends Life next year, as stand-in. Mr Tookey told MPs on the Treasury committee Lloyds directors have had several meetings with UK Financial Investments, which manages the taxpayer's 41% stake in the bank, about the situation.

"We are regularly in contact with UKFI and members of the Treasury about management issues at Lloyds," he said.

Mr Tookey admitted this has hit the bank's share price, which has fallen 28.5% since the news of Mr Horta-Osorio's problems broke, but said investors are also concerned about market and economic conditions.

"I would attribute an element of the share price reduction to some of the management issues in Lloyds at the moment," he said.

Meanwhile, Mr Flint faced questioning by MPs on HSBC's postponement until next year of its decision on whether to move its headquarters from London. It calculates that capital rules proposed by the Independent Commission Banking (ICB) could cost it $2.1 billion (£1.6bn) a year.

"It is not intended to be a gun to the head," he said.

Asked about possible new locations, Mr Flint hinted at a move to Hong Kong where it shifted its chief executive's office in 2009.

"It would undoubtedly be a place where we have a considerable presence," he said.

Mr Hester revealed RBS expects implementing the ICB reforms would add £500 million to £1bn to its running costs.

He added that a 10% increase in capital would knock around £750m from pre-tax profits.