The Royal Bank of Scotland's (RBS) plan to bolster its insurance arm by way of a £1.1bn cash bid for Churchill Insurance will be driven by cost savings it sees in integrating the IT systems.
Should RBS be successful with its bid, which has the backing of Churchill's board, it would move the insurance firm over to its IBM-based infrastructure.
Through combining its IT systems, along with central administration and claims-handling functions, RBS believes it could save over £86m a year.
"Last year Churchill made £86m. We could see synergies in excess of that through the acquisition," said an RBS spokeswoman.
The merger is likely to result in job losses within the IT department.
RBS confirmed that it would continue to run separate call centres and that it did not expect the acquisition to affect customer-facing roles.
But the spokeswoman added that it was too early to speculate about back office job losses.
RBS expressed confidence in its ability to integrate the IT systems following its success with the NatWest merger, where the bank completed its IT integration project, billed as its largest ever, three months ahead of schedule.
The £1.1bn Churchill deal is subject to regulatory approval.
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