Just a year after Edinburgh-based HBOS was swallowed by Lloyds TSB, investment bank Noble, which has around 90 staff in the UK and 20 in India, said yesterday it had agreed to be bought by Execution.

The undisclosed offer is subject to the consent of the Financial Services Authority.

The new institution, to be called Noble Execution, will have a staff of 250. It will be headquartered in London but will “retain a strong Scottish presence”.

Noble, founded in 1980 by controversial financier Sir Iain Noble and his brother Tim, has been heavily loss-making recently. It recorded a £9.5m pre-tax loss for the year to the end of November 2008, after falling £2.5m into the red the year before.

Noble received a £4.6m capital injection from financial services firm Arch last year in return for a 19% stake.

Execution staff will take the top jobs in the combined firm with executive chairman Nick Finegold and chief executive Simon Brookhouse retaining their positions.

Noble chief executive Angus Macpherson, formerly with Merrill Lynch, will be deputy chief executive. Noble finance director Charles Ashton, formerly of HSBC and Flemings, will continue.

Ironically, Noble Group chairman Ben Thomson, who chairs free market think tank Reform Scotland, has been a champion for retaining a strong Scottish financial sector.

He told the Sunday Herald last weekend: “It’s vital for the Scottish financial sector and the economy that, five years from now, we have two or three banking institutions headquartered here.”

Thomson will be a non-executive director of the combined company as will Noble board members Keith Jones, David Potter and Stephen Curran.

Finegold said: “Noble’s strengths in mid and small cap company investment banking and research are widely acclaimed.

“Combined with Execution’s market-leading capabilities in research, sales and trading capability across 120 European and international big cap stocks, we will create a new force in international investment banking.”

Macpherson said: “Execution Noble will offer a credible alternative to traditional full-service investment banks.”

Macpherson has been the driving force behind a change in Noble’s strategy to focus on research in mid and small cap companies after taking the reins of the company in March 2007 from one-time Scottish international decathlete Thomson.

Last year, Noble acquired small and mid-cap research specialist Clear Capital.

Noble spun off its equity fund management arm, now called Cornelian, in 2000, but retains a fund management business that specialises in managing alternative asset classes including PFI funds.

Thomson, a supporter of Scottish independence, was recently linked to a bid by a group of Scottish businessmen for the Scotsman titles owned by Johnston Press. He is also chairman of the National Galleries of Scotland.

The deal is likely to have led to a windfall for senior figures at Noble Group.

In January 2008 management and employees substantially bought out the original shareholders Sir Iain Noble, his brother Tim and Thomson, although they retained some non-voting shares.