Lloyds Banking Group has announced a return to profit after achieving cost savings through initiatives including a consolidation of its back office operations sites and IT job cuts.
In February, the part-nationalised company revealed it had completed a large Halifax system integration aimed at dramatically cutting costs. It followed this with an announcement of 100 IT job cuts and the offshoring of 300 IT roles.
In its results for the quarter ended 31 March, Lloyds said that these initiatives, as part of its simplification programme, have helped to achieve projected annual savings of £352 million, and a seven percent reduction in total costs. It is aiming to save £1.7 billion in 2014.
Furthermore, the IT job losses announced were part of a total 3,290 role reductions announced in the quarter, taking the total number of redundancies to 5,388 since the start of the simplification programme.
Meanwhile, some of the bank’s IT projects are now reaching the next stages of deployment.
“The longer-term IT-based re-engineering programmes due to deliver from late 2012 onwards are now commencing detailed design and build.
“A number of early starters – including Account Switchers for new customers, which is part of our end-end processes initiative – are approaching live rollout,” Lloyds said in its results.
It has also improved some of its internet banking offerings, for example, by improving the international online payments capability and increased the functionality of its Lloyds TSB Money Manager service.
Lloyds announced a pre-tax profit of £288 million in Q1 2012, up from a loss of £3.47 billion the same period last year.
Unite the union used the results as an opportunity to call for an end to the IT job cuts.
David Fleming, Unite national officer, said: “The profits announced today by the nationalised bank is evidence of the dedication and hard work of the Lloyds staff.
“These results must mark a turning point for the bank to halt the large-scale job cuts and the offshoring of work from its IT function.”