Lloyds Banking Group has nearly doubled the amount it has spent on simplifying its business processes, investing £608 million in a number of areas including IT.
Since merging with HBOS in 2011, Lloyds Banking Group has undertaken a group-wide programme to simplify its operations, aiming to reduce costs and improve customer experience. This has included efforts to rationalise its IT application estate, increase automation, as well as cut suppliers by more than 7,000 and reduce staff headcount.
In its latest quarterly financial results, Lloyds revealed that its simplification costs relating to IT, business costs of implementation and severance reached £608 million in the nine months up to 30 September 2013. This was nearly double the figure (£332 million) for the same period in 2012.
The group has now spent a total of £1.46 billion on its simplification programme, which has resulted in annual ‘run-rate’ savings of £1.3 billion.
The bank said in its financial statement: “We are targeting a leading cost position through the delivery of our simplification programme, which is already substantially decreasing our operating leverage and improving our processes and the service we deliver to our customers.”
Improving customer experience
Meanwhile, the bank has invested in improving customer experience across its business. This has included the rollout of a new point-of-sale system for its wealth business and the pilot of an improved customer relationship management (CRM) system.
Lloyds has also invested in new website functionality for its asset finance business, to enable customers to get car finance quotes online.
Group chief executive António Horta-Osório said: “We are well on our way to becoming a better, simpler, low risk bank, which delivers the products our customers need and the strong performance and sustainable returns our shareholders expect.”
The bank also highlighted the total costs of the re-launch of TSB bank, part of plans dubbed Project Verde. Lloyds has now spent £1.36 billion on plans to sell-off TSB, with Lloyds reiterating aims to target an IPO in “mid-2014”. The bank was relaunched in September, though continues to run on Lloyds’ IT systems.