Lloyds Banking Group has said it is readying a new system architecture, as it rationalises existing technology following the acquisition of HBOS two years ago.

The bank, some 41 per cent-owned by the taxpayer, said it had cut a further £23 million, or four percent, from IT costs in the first half of the year. It swung to a £1.6 billion profit during the period, compared to a £4 billion loss the year before, as it cut costs across the business and losses eased on bad loans.

The IT savings form part of total efficiencies of £2 billion, being targeted by 2011 from the HBOS merger and coming from systems, processes, staff and property costs. Some 16,000 staff have left the business so far.

"The integration programme commenced IT systems design and build in 2009 with the build for the integrated technical infrastructure completing in the first half of 2010," the bank told investors today. "A comprehensive programme of testing is now underway ahead of commercial and retail systems integration and data migration in 2011."

CIO 100 ranked Lloyds is currently rationalising products, processes and systems. Steps include an improved online mortgage application process for mortgage brokers, moving to a single "scalable" internet banking platform, and the migration of all HBOS staff data onto the Lloyds TSB human resources platform.

Some of the largest IT steps have been taken in the company's retail division, which is removing duplicate IT platforms and "making it significantly cheaper and simpler to introduce products and services".

The original Lloyds TSB part of the group extensively uses Oracle Hyperion financial modelling systems, Microsoft SQL Server, the Sun Solaris operating system, Microsoft Windows Server and VMware virtualisation, as well as a number of bespoke systems. It is not clear which systems will be kept.