Bank of Scotland is to relinquish its majority holding in First Banking Systems, the joint venture IT outsourcing company created in partnership with FI Group.
The economic effect of the change will be neutral for both FI and Bank of Scotland, insist the partners. FI will become the majority shareholder under the new structure. The committed revenue income from Bank of Scotland to FBS remains at £285m to 2007.
The change in structure reflects the development of FBS into a comprehensive IT services organisation, says the bank, which would be more appropriately managed as an FI Group subsidiary. Five hundred Bank of Scotland staff, who are currently seconded to FBS, will be transferred to FI under a Transfer of Undertaking (TUPE), safeguarding their existing contractual terms and conditions, says the company. Consultation with staff will commence shortly and the transfer is planned for early April 2001.
The joint venture, which was created in June 1998, provides Bank of Scotland with IT application development and maintenance services. BoS initally held a 51 per cent stake in the company. The size of its reduced holding has not been disclosed.