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June 2011 | Adam Leach
Lloyds Banking Group
is to reduce its supply base from 17,000 to 10,000 to save £1.5 billion a year
by the end of 2014.
Published
today, the bank’s Outcome of strategicreview - drawn up after new chief executive António Horta-Osório’s first
100 days in charge - outlines the group’s future plans which includes reducing
third-party spend by 15 per cent.
The
review said the bank would change the way it operates to focus on strengthening
supplier relationships, simplifying processes and optimising demand management.
A
spokeswoman for the company told SM reducing
supplier numbers would be a gradual process. She said: “The procurement team
will be working through it over the next three years”. She added the process
was driven by a desire to get competitive market prices.
The
strategy will also see the group reduce staff numbers by 15,000, partly by centralising
its “control functions” – operations and IT, finance, risk management, HR and
legal. The strategy said the cuts will come through a reduction in back-office
functions and middle management.
Horta-Osório
said in a statement: “We will unlock the potential in this franchise over time
by creating a simpler, more agile and responsive organisation, and by making
substantial investments in better-value products and services for our
customers.”
The
report also said the group’s integration programme to combine the functions of
Lloyds and HBOS is on track to be completed by the end of this year and would
generate annual savings of £2 billion.
