Procurement 'key' to cost savings at Lloyds Banking Group

5 August 2009

6 August 2009 | Jake Kanter

Lloyds Banking Group has saved £34 million this year through procurement following its tie-up with HBOS in 2008.

In its interim results statement for the first half of 2009, Lloyds reported that purchasing is playing a "key role" in helping it reach the £1.5 billion savings it aims to achieve by the end of 2011.

To lower costs following the high profile merger, purchasing has consolidated existing contracts across the group, removed duplication in the supply base and taken advantage of greater spending power. Overall, the company has cut costs by £107 million in the first six months of this year and is targeting more than £400 million savings for 2009. Other savings are being made in areas including combining back office functions and consolidating IT systems.

Both Lloyds, whose function is run by Caroline Booth, and HBOS spent around £2 billion a year before the merger. Shares in Lloyds surged nearly 11 per cent yesterday, despite the bank posting a £4 billion loss in the first half of the year.

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