Lloyds TSB in £1bn IT megadeal talks with IBM

Lloyds TSB is reported to be in talks with IBM over an IT outsourcing megadeal worth up to £1bn over the next ten years.

IBM is one of two companies bidding for the work that will see thousands of IT staff moving from Lloyds TSB to the winning IT supplier, according to reports in the Sunday newspapers.

There are no details as to the extent of any offshore element of such a deal, although the bank has faced protests from unions over plans to move another 1,500 positions to India following the closure of a call centre in Newcastle last year.

Since then Lloyds TSB and the union have followed the example set by Barclays and HSBC and set out an agreement on how staffing and redundancy issues in future offshore outsourcing projects will be dealt with.

The proposed £1bn IT deal will cut millions off Lloyds TSB's IT costs and the winning bidder is expected to run the systems and network linking the bank's branches.

Dai Davies, spokesman for finance union Unifi, told silicon.com that it is not aware of any specific outsourcing plans at Lloyds TSB at the moment but that it "wouldn't be a surprise" if talks have started.

"We're obviously concerned that Lloyds TSB is looking at outsourcing but at this stage we've no idea what it is doing," he said.

But he added that as part of the framework agreement with the bank the union should be consulted at the earliest possible stage.

A spokeswoman for Lloyds TSB would not confirm or deny that the bank is planning to outsource its IT or whether it is in talks with IBM.

She told silicon.com: "We review all our suppliers on an ongoing basis but we don't comment on speculation."