Lloyds TSB today revealed plans to chop an extra £500 million in costs from its merger with HBOS to create Britain's biggest high street bank that will be known as Lloyds Banking Group.

Lloyds TSB had expected to cut £1 billion in costs from the expected tie-up.

However, it said today that it would increase savings to £1.5 billion by 2011, by closing overlapping branches and call centres and ending the use of duplicate computer systems.

Up to 30,000 jobs could be affected if the merger goes ahead, but Lloyds TSB declined to give a figure on redundancies this morning when it published details of the deal.

The bulk of the cost savings will come from the retail banking businesses, where Lloyds aims to cut £790 million. It will also chop £235 million from the combined insurance and investment businesses, merging fund management activities and cutting duplicated roles.

Lloyds also said £430 million will be cut from its wholesale business and international banking.

Meanwhile, the new bank's simplified name will mean the erasure of the historic Halifax, Bank of Scotland and the Scottish TSB names from the corporate lexicon.

The new super bank’s only concessions to Scottish corporate sensitivities are to retain the Bank of Scotland's Edinburgh headquarters on The Mound as its base north of the border and to hold the company's annual meetings in the nation.

High street brands will remain unchanged, at least initially, but the loss of familiar names from corporate literature reflects the fact that London-based Lloyds is in charge.

No HBOS board member will join the Lloyds' board after the merger completes and Andy Hornby, its chief executive, is stepping down. The combined company will be run by Eric Daniels, chief executive of Lloyds TSB, and Sir Victor Blank, its chairman.

Details of the name change emerged as Lloyds TSB published further details about its rescue takeover offer for HBOS, a transaction brokered by Gordon Brown to ensure that the struggling HBOS did not collapse amid the market turmoil.

However, it is not certain that the merger will go ahead after it emerged that Jim Spowart, former chief executive of HBOS's Intelligence Finance division, was considering making an offer for the group, and has been approached by a foreign suitor about possibly brokering a deal.

Both banks are also taking part in the Government's £37 billion bailout package, and together they are seeking to raise £17 billion to prop up their balance sheets.

Both are seeking cash from the City as well as the Government but, if private money is not forthcoming, taxpayers will own 43.5 per cent of the ordinary shares in the new Lloyds.

The Government will pay £4 billion in any event to buy special preference shares, which pay a high dividend of 12 per cent.

Lloyds TSB is taking £1 billion, while HBOS has signed up for £3 billion, but today Lloyds promised it would repay sometime next year, allowing it to resume dividend payments to shareholders.

In a document to shareholders detailing its bid for HBOS, Lloyds TSB said that today its "clear intention" is to repay the preference shares "during 2009". If Lloyds repays the sum by August 2009, shareholders will be entitled to a dividend later next year.

Underlying the current economic difficulties, Lloyds TSB said its third-quarter profits would be £270 million lower as falling house prices affected value of the bank's mortgage book.

But HBOS suffered more, announcing £2.7 billion in write-offs on corporate and residential loans, and hits relating to the fall of Lehman Brothers, and said that it would also be affected by the collapse of Iceland's three banks.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive