Under the contract IBM will manage the bank's applications and central mainframe IT infrastructure through to 2012.

IBM says the new contract extends the five year deal signed in 2002 and includes a 25% increase in the power of the bank's technology systems.

The aim of the new agreement is to provide El Monte with more flexibility to respond to recent fast growth in the business, says the vendor.

Manuel López Casero, El Monte's services and administration manager, says: "This agreement will also allow us to grow and better respond to market changes counting on a flexible infrastructure and access, through IBM, to best pratices in the market and also to cutting edge technologies."