Lloyds Banking Group (LYG)  is preparing to outsource a significant portion of its IT staff  in a deal with IBM (IBM - Get Report) as part of a cost-cutting program at the British lender.

If Lloyds signs the £1.3 billion ($1.6 billion) contract with IBM, then nearly 2,000 staff will transfer to the tech giant, but their roles are expected replaced by IBM over a period of four years with different workers, according to a newsletter from Lloyds Trade Union seen by TheStreet.

The deal, called Project Aurora, was to be announced in January but was delayed as the two parties thrashed out the final details, according to the letter. A formal announcement is now expected within days.

Lloyds shares were marked 0.3% higher by midday in London and changing hands at 68.96 pence each compared to a 0.14% gain for the Stoxx Europe 600 Banks Index.

Outsourcing IT functions will save Lloyds in the region of £759 million every year, according to the union letter, but the move has been criticized internally, given that it will also involve off shoring customer data and responsibility for the bank's payment, treasury trading, settlement and digital services system, which has been seen as presenting a security risk.

Lloyds, which was bailed out by the U.K. government during the financial crisis, has also previously held discussions over a possible deal with HP Inc (HPQ - Get Report) , the newsletter stated. But the bank opted for IBM given recent management changes at HP and its move to spin off its hardware and services business, which prompted concerns over stability at the firm and 'the depth of our relationship with their changing leadership'.

Once Britain's largest lender, and briefly counted among the largest in the world, Lloyds has cut more than 50,000 jobs since the financial crisis of 2008 when it was crippled after having gone to the rescue of the ailing Halifax Bank of Scotland. At the beginning of 2017 it still had more than 75,000 employees.

After an eight year post-crisis restructuring period, the bank reported its best full-year earnings performance in a decade back in February and delivered against shareholder expectations for dividend growth.

It also returned to the acquisition trail with a splash in December when it announced that it is buying the U.K. credit card business of Bank of America (BAC - Get Report) , which marked a return to a more aggressive, growth oriented, mindset at the bank.

The large MBNA portfolio of receivables not only propels Lloyds into second place in the U.K. credit card league tables, it will also help to repair some of the damage wrought on the lender's bottom line from years of record low interest rates, given that credit card interest rates have held broadly stable in the years since the financial crisis.

Out of the twenty analysts recorded by Factset (FDS - Get Report) as covering Lloyds Banking Group stock, twelve of them have recently rated it as a buy, while six of them currently rate it a hold.