LONDON (AP) — Britain's part-nationalised Lloyds Banking Group said yesterday that it has chosen an executive from Spanish bank Santander to be its next CEO.

Antonio Horta-Osorio, who has headed Santander UK since 2006, will take over from Eric Daniels on March 1.

Lloyds shares were up 3.5 percent to 69.75 pence following the announcement.

Horta-Osorio, 46, began his career at CitiBank Portugal where he was in charge of capital markets. After working for Goldman Sachs in New York and London, he joined Santander in 1993 as chief executive of Banco Santander de Negocios Portugal.

With Santander in Britain, he oversaw the acquisition by unit Abbey National of the savings business of Bradford & Bingley in 2008 and the takeover of Alliance & Leicester last year.

In August, Santander agreed to buy 318 branches from Royal Bank of Scotland, all but seven of them RBS-branded offices in England and Wales. That deal is due for completion in December.

Daniels led Lloyds TSB in acquiring Halifax/Bank of Scotland, a deal which made Lloyds Britain's biggest retail bank but drove the combination to the brink of collapse. The government stepped in to bail out Lloyds, and now holds 40.6 percent of its shares.

Ian Gordon, analyst at Exane PNB Paribas, said Horta-Osorio was a "perfect choice" for Lloyds.

Horta-Osorio had led Santander through a successful process of integrating "three relatively weak UK retail franchises" and has demonstrated the potential returns from a retail banking group.

The task at Lloyds is similar, Gordon said: "to complete the rationalisation of the group, shrinking the balance sheet, over-delivering against the targeted £2 billion cost synergies following the HBOS acquisition, and transforming the combined entity into a predominantly retail-focussed low-risk UK-centric bank."

Lloyds said Horta-Osorio would be paid £1.035 million ($1.67 million) per year, a cash allowance of £610,000 per year to fund his own pension, and an undisclosed amount to compensate him for deferred benefits he will lose by leaving Santander. He will also be eligible for a discretionary annual bonus up to 225 percent of salary, and share-based, deferred incentives worth up to 420 percent of salary.