The plans were flagged in May this year, when the bank announced that it had entered exclusive negotiations with IBM to consolidate Nordea's overall IT production services into an on-demand infrastructure.

Under the finished agreement, Nordea and IBM are forming a single-purpose joint venture, which will employ about 900 employees from Nordea starting 1 November 2003.

Cost savings are key to the deal, with IBM charged with making significant savings on Nordea's annual EUR300-340 million IT production services bill.

The bank is to spend an initial EUR30 million in set-up costs in the fourth quarter.

In a statement, the bank says: "In terms of absolute costs there will be a slight decrease during the next three years despite important transformation investments and volume growth."

Under the agreement, a number of technological platforms will be consolidated into one location, and networks and desktops will be standardised. IBM will deploy an environment that automates many tasks associated with key IT functions, such as resource provisioning, asset tracking, workflow scheduling, and real-time infrastructure monitoring.

IBM and Nordea will jointly staff a 'Transformation and Innovation' centre to explore opportunities for additional cost savings and performance improvements.