25 February 2011 | Lindsay Clark
Lloyds Banking Group expects to save more than £236
million annually in procurement from 2012 thanks to negotiations with suppliers
carried out last year.
In its financial
results for 2010, which revealed a profit of £2.2 billion, the financial
services firm said vendor negotiations resulted in more than 90 per cent of its
expenditure being consolidated with the bank’s top 1,000 vendors, following the
integration of rival bank HBOS, which it acquired in 2008.
A spokesman said savings
from the consolidation of supplier contracts were part of a three-year
programme following the merger. He added the group expected to increase the
level of future savings from negotiation, which will kick in from 2012, this
year.
The cost of running the
procurement department in 2010 fell by £1 million, 2 per cent compared with the
previous year, to £56 million in 2010.
Eric Daniels, chief
executive at Lloyds, said in a statement: “We continued to make good progress
on the integration of Lloyds TSB and HBOS, one of the largest and most complex
programmes undertaken in the UK, exiting the year with cost synergies of £1.4
billion, as expected. We achieved savings across a wide range of group
activities, including implementing improved processes which are now being used
on a harmonised basis across the group, and driving savings in property and
procurement.”
The group has already
surpassed its target of £1 billion year-on-year savings from the merger, which
it set in 2008.
