Lloyds Banking Group forecasts £1.5bn cost savings

Lloyds Banking Group said today that it expected annual cost savings of at least £1.5bn (€1.6bn) by the end of 2011 after its acquisition of Halifax Bank of Scotland (HBOS) was completed.

The newly-formed group said Lloyds TSB had traded satisfactorily since its last update on December 12.

It added that, although the difficult market conditions suffered by HBOS last month have continued, there has been no major change in trading at HBOS businesses.

The takeover has created a banking giant with around 145,000 staff and 3,000 branches across the UK.

Competition rules were waived to allow the deal but unions are worried over thousands of possible job cuts through the tie-up.

The company previously flagged £1.5bn (€1.6bn) in planned cost savings, but said today it expected a figure greater than this by the end of 2011.