The Conservative peer will move into the new role having served as a non-executive director of Lloyds and chairman of its subsidiary Scottish Widows Group.
In a statement issued by the bank on 2 December, Lord Blackwell said: “This is a great opportunity to be part of helping the bank go even further in serving customers and supporting the UK economic recovery as it returns to full private ownership.”
He will replace Sir Win Bischoff, who announced his retirement earlier this year after four years in the role, and is expected to take up the position in the new year.
Sir Bischoff said: “Over the past four years, the Group has made significant progress in its goal to become a strong, efficient, UK-focused retail and commercial bank. Whilst clearly some challenges remain, the performance of the Group is well on track.”
Lord Blackwell became director of group of development at Natwest three years prior to its controversial takeover by the Royal Bank of Scotland Group in 2000, when he left.
Before joining the world of banking, Lord Blackwell served under Margaret Thatcher from 1986 to 1987 and John Major from 1995 to 1997 in their respective policy units.
He was also a non-executive director for the Centre for Policy Studies, a centre-right think tank, from 2001 to 2008 and still sits on its board.
Lord Blackwell has frequently advocated right-wing views in his role at the think-tank, most recently calling on the prime minister in January to insist on a much “looser” relationship with the European Union.
George Martineau, employee benefits director at Edinburgh-based Mearns & Company, said: “The whole banking industry is in recovery mode and it is hard to predict which bank will be first to regain its pre-2008 position. The recent Co-operative debacle has rocked people’s confidence. But Scottish Widows is a solid company we like so this is a good appointment from our point of view.”