BANK of Scotland Ireland (BOSI) chief executive Joe Higgins has resigned as a director of the stricken lender.

Higgins will remain on as CEO and the bank said there was nothing unusual in the move given its plans to close by the end of the year. Higgins, who became chief executive following the departure of long-serving chief Mark Duffy in 2009, was the only executive director on the board, which is chaired by former C&C Group chief executive Maurice Pratt.

However, it will heighten speculation that Higgins is about to be awarded the contract by BOSI's parent, Lloyds Banking Group, to manage the service company that will run down the bank's €32bn loan book over time.

Higgins, along with other senior BOSI executives, is the favourite to land the contract from Lloyds. It is understood that the UK bank will make a decision on the contract within the next two weeks.

All bar about 50 of the bank's remaining 800 staff in Ireland will move to the service company, which will continue to run the bank's loan portfolio.

As revealed by the Sunday Tribune last month, Lloyds pulled the plug on BOSI after it wracked up billions of euro of losses on loans to property developers.

The bank has required €4.5bn of capital from Lloyds in the last two years.