Germany-based HypoVereinsbank (HVB) has signed a three year agreement to outsource key areas of its IT application development operations to IBM.
From January 2007, IBM Global Services will manage the modernisation, standardisation and ongoing development of the bank's credit applications and will work with the bank on strategic projects.
HVB, which was acquired by European banking giant UniCredit Group last year, says the deal "marks a fundamental step toward effective and sustainable cost reductions in the bank's IT operations".
Under the deal 365 of the 1800 employees at HVB's information services unit will transfer to IBM in January.
Says HVB COO Matthias Sohler: "By means of the agreement we have signed today we will be able to arrange essential capacity adjustments in our IT so as to ensure that employees have good long-term prospects.
"At the same time we can ensure that our IT services continue at their customary high level and realise significant synergies in IT from the merger with UniCredit."
As part of the project IBM is setting up a new subsidiary that will include a banking competence centre that will provide integration services to financial services firms.
Matthias Hartmann, GM IBM Germany and head of IBM Global Business Services, says: "IT migration and integration are of fundamental importance if synergy targets are to be achieved."