UK’s leading banking software groups as it continues in its quest
to be a leading core banking solutions provider. The group has
raised its earnings outlook for the second time in 2008 as a result
of its latest purchase, estimating the deal will contribute $11
million to earnings in 2008 and $40 million in
2009.
Swiss IT vendor Temenos has continued its acquisition strategy with
the completion of a $49 million deal for UK software solutions
provider Financial Objects, a move which the group sees as
underpinning its long-term desire to become the core banking
software market leader.
Temenos had already made two other
significant core banking acquisitions over the past 18 months: in
March 2007 it purchased German firm ACTIS.BSP for $19 million,
while in July this year it snapped up the core banking assets of
long-time Greek partner Informer for $40 million.
Unlike other diversified technology
players, Temenos says it is single-minded in its focus on the
financial services industry, despite the deepening downturn that
has continued to engulf the sector over the past quarter. Temenos
believes the fact that Financial Objects’ own focus is largely on
the banking market – though the firm does also provide solutions
for the energy sector – is a key upside from the deal.
Go deeper with GlobalData
“The consensus among industry analysts is
that core banking replacement is becoming a bigger priority for
banks and most expect the market for third-party banking software
to grow at between 7 and 10 percent annually until 2010,” said
Temenos CEO Andreas Andreades earlier this year.
The Financial Objects acquisition will add
over 50 core banking customers to Temenos’ portfolio, on top of the
30-strong ACTIS.BSP client base and the 15 Middle East and Eastern
European clients provided by the Informer deal. Organic growth has
also been strong; Temenos’s flagship T24 core banking system was
selected by a record 47 new customers in 2007.
The group raised its earnings outlook for
the second time in 2008 as a result of its latest purchase,
estimating that the Financial Objects deal will contribute $11
million to earnings in 2008 and $40 million in 2009. Its outlook
for group revenues in 2008 is now $444 million, a 34 percent
year-on-year increase in line with half-yearly figures which saw
net profit rise by 31 percent year-on-year to $96 million for the
second quarter of 2008 alone. The firm also signed 12 new T24
clients in the second quarter to add to the 10 core banking clients
that signed in the first three months of the year.
“Since we last reported, more banks –
especially tier ones – have faced recapitalisation issues. Yet, we
continue to deliver ahead of our forecasts,” said Andreades. “I
think in part this reflects the profile of the Temenos customer
base – around two-thirds of new licences are coming from emerging
markets – and, in part, it reflects the nature of the software we
sell, which remains a strategic area of capital expenditure for
banks that want to pursue growth and profitability.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe Financial Objects deal also offers the
potential for significant cross-selling synergies. The UK firm’s
expertise in the wealth management sector is expected to be
leveraged; Temenos sees potential in selling wealth management
functionality to its T24 customer base, as well as highlighting the
attractions of the T24 model to customers of Financial Objects
activebank and IBIS banking products.
Temenos said in a statement that it
envisages such revenue synergies will begin to be seen in 2009, but
has not factored them in to its projections. Cost synergies,
meanwhile, are seen as contributing $3.1 million in 2009 and $5
million in 2010. Necessary restructuring efforts and resultant
costs – estimated to amount to $1 million – will be borne and
completed in full-year 2008.
Andreades added: “We are demonstrating
that we can and will continue to successfully complement strong
organic growth without compromising shareholder value or losing
focus. For me, this underscores both our ambition and [our]
potential.”
IT CONTRACTS
RBI Fintech DealWatch tracks recent major technology
contract wins with a focus on the retail financial services
industry as well as fintech mergers and acquisitions and innovative
new product launches
| Country | Participants | Type/value | Details |
|
Finland |
Nordea, Wincor Nixdorf | ATM contract win | Wincor Nixdorf has won a five-year contract to provide and operate 500 transaction terminals in Finland for Nordea, Scandinavia’s largest bank by assets. The roll-out will begin in summer 2009 with a view to completion by the end of the year. |
| UK
|
NCR, MIA ATMs | ATM contract win | ATM specialist NCR has partnered with media agency MIA ATMs to launch the NCR APTRA Promote Content Service in the UK, which will enable advertising campaigns to be displayed across the UK’s 65,020 ATMs. NCR said it was experiencing “high levels of interest” from banks looking to sign up to the service. |
| Italy |
Poste Italiane, Xiring | E-security contract win | Poste Italiane is to use the Xi-Sign 4000 authentication system from Xiring for its online banking service BancoPostaOnline. More than 700,000 e-banking customers will benefit from the security solution, according to Poste Italiane. |
| The Netherlands |
Rabobank, Unisys | Contract win | Dutch co-operative Rabobank has signed a deal with Unisys which will enable the bank to process up to 200 foreign-based cheques per minute. Unisys will modernise Rabobank’s cheque-processing system by migrating operations to a Microsoft .NET framework. |
|
South Korea |
Standard Chartered First Bank Korea, |
Contract win |
Standard Chartered First Bank Korea has |
| Cambodia |
ACLEDA Bank, Temenos |
Core banking contract win |
Cambodian bank ACLEDA Bank has become the |
| Austria
|
PayLife Bank, Sinsys | Card processing contract win | Card processor Sinsys, a joint venture between SIA-SSB and Atos Worldline, has signed a five-year contract to provide card processing services to Austria’s PayLife Bank. The deal will commence in mid-2010 and replace an existing arrangement with First Data. |
| US |
The Bancorp Bank, Obopay |
Prepaid card contract win |
The Bancorp Bank is to issue prepaid cards |
| Mexico |
Compartamos Banco, Oracle | AML contract win | Mexican microfinance specialist Compartamos Banco has implemented Oracle’s Mantas anti-money laundering system. The technology will enable the bank to monitor accounts and transaction information for its one million customers. |
| Spain | Banco Sabadell, SAP | HR contract win |
Banco Sabadell, Spain’s fifth-largest bank by market capitalisation, is to improve its human resources functions via the installation of SAP’s ERP Human Capital Management system. Processes used by over 10,000 staff at the bank will be migrated to the SAP platform, which will allow for the strategic planning of employee costs and analysis of staff retention. |
| Brazil | Banco do Brasil, Diebold | ATM contract win |
Banco do Brasil, Latin America’s largest bank by assets, has agreed a deal with ATM manufacturer Diebold which will see it supplied with 3,500 ATMs and 1,900 cheque dispensers. Diebold says the ATMs will offer a safe-locking function and improved encryption features. |
| Global | Norkom Technologies, IBM | Strategic partnership | Norkom Technologies and IBM are to partner on an initiative designed to provide new financial crime and compliance (FCC) software solutions to financial institutions. Norkom has said that the two firms have aligned research and development efforts around IBM’s InfoSphere Entity Analytic Solutions portfolio. |
| UAE | Dubai Islamic Bank, Norkom Technologies | Contract win |
Dubai Islamic Bank is to roll-out Norkom Technologies’ suite of financial crime and compliance solutions across its UAE and Pakistani operations. The institution is Norkom’s first Islamic banking customer. |
| UK | NCR, NCI | Acquisition |
NCR has purchased UK-based teller connectivity software provider NCI for an undisclosed amount. NCR said the deal demonstrates its commitment to the teller automation market and its desire to enhance its total solution offering. |
| Ireland | Allied Irish Bank, Oracle | Contract win | Allied Irish Banks (AIB) is to install Oracle’s FlexCube technology in order to provide SEPA payments processing for both retail and corporate accounts in the UK and Ireland. |
| Kuwait | Thales, Bank of Kuwait and the Middle East |
Contract win |
Global technology provider Thales has provided Bank of Kuwait and the Middle East (BKME) with an instant EMV card issuance system which enables new chip and pin cards to be provided to customers within 10 minutes. The system has now been rolled out across all 22 BKME branches in Kuwait. |
| Italy | Zopa.it, Experian | Contract win |
UK-headquartered peer-to-peer lender Zopa has selected Experian to assess borrower risk at its Italian operation Zopa.it. Experian will deliver a personal scorecard to the lender, enabling it to calculate a borrower’s solvency, the likelihood of default and probability of repayment. |
| UK | BT, HP | Contract amendment |
BT, which has begun a push into the UK retail banking market, has signed a $660 million contract amendment with HP which extends the firms’ existing agreement until 2016. Under the terms of the deal, HP will continue to provide and support BT’s servers and storage. |
| Global | Chordiant, IBM | Partnership extension |
The global alliance between IBM and customer service solution provider Chordiant has been expanded for an additional five years. Previous implementations carried out by the alliance include a project designed to improve front-office capabilities at ING Bank Slaski in Poland. |
| Global | HSBC, Cisco | Contract win | HSBC is to utilise Cisco’s TelePresence technology in order to expand its virtual conferencing capabilities. TelePresence rooms will initially be available at HSBC centres in London, Chicago, Hong Kong, Mexico City, New York and Dubai. |
| Germany | Wincor Nixdorf, Bankberatung | Stake acquisition |
Wincor Nixdorf has purchased a 51 percent stake in IT provider Bankberatung for an undisclosed amount. Bankberatung, which serves the German retail banking market, will help Wincor Nixdorf improve back-office and core banking processes. |
| Europe | ABN AMRO, Sentenial | Contract win |
ABN AMRO has selected Irish IT vendor Sentenial to provide the bank with a direct debit processing system in line with Sepa requirements. The multi-currency, multi-bank and multi-scheme capabilities of the Sentinial system made it attractive to ABN AMRO, according to the vendor. |
| Germany | Deutsche Postbank, IBM | Contract win |
Deutsche Postbank is to install three IBM mainframes in an effort to consolidate applications in the bank’s data centre as well as improving energy efficiency. Postbank sees the IBM System z10 mainframes as helping create a centralised IT concept. |
