In order to achieve its aim, the Bank of Scotland/Halifax banking group is looking to improve procurement methods with more bulk buying and eliminate IT overlaps.
"Key to the delivery of sustainable returns for shareholders is the ongoing drive for cost leadership, where HBOS now expects to achieve a cost:income ratio in the mid-30s per cent, by the end of the decade," the bank said.
Its currently has an industry-best cost:income ratio of 40.9 per cent, meaning for every dollar it earns it spends 40.9 cents on costs.
An HBOS spokesman assured that the cost-cutting drive would not result in job losses and that is has no plan to offshore banking services.
"Offshore banking is guilty until proven innocent," he added.