Temenos unscathed by credit crunch

Temenos unscathed by credit crunch

Swiss banking systems vendor Temenos has posted hefty rises in revenue and profits for 2007 and says its business has not experienced any slowdown as a result of the credit crunch.

The vendor is reporting an 88% rise net income to US$64.7 million for the full year 2007, compared to $34.4 million in 2006.

Full year revenue came in at $329.9 million, a 53% rise from the $216.3 million reported for 2006. Licence revenue rose 52% from $97.9 million in 2006 to $148.8 million in 2007.

Temenos says net profit for the fourth quarter was up 73% on the year ago period to $44.3 million, while revenue jumped 59% from $78.8 million to $125.3 million.

The vendor has signed 19 new core banking clients in the fourth quarter and 49 for the full year.

Commenting on the results, Temenos CEO, Andreas Andreades, says: "Although we are alive to the changes in a challenging macroeconomic environment, these results demonstrate that, to date, we have not experienced any slowdown as a result of the credit crunch affecting financial institutions."

Andreades says Temenos has a strong sales pipeline "which stretches out for more than 12 months".

Fears that banks will cut back on IT spending have been growing since the credit crisis in August last year.

The first signs of a possible downturn emerged in early September, when dealing room vendor Tibco warned of a sudden drop in license sales at the end of its third quarter. This prompted some analysts to suggest that the credit crunch will hit bank IT spending budgets.

In November UK business and technology group Detica also reported a 'sharp decline' in business from investment banks following the global credit crunch, and earlier in the month UBS analysts downgraded UK banking systems vendor Misys amid concerns that banks were reviewing IT budgets. But Misys said last month that its business hadn't been hit by the crunch and that there had been no slowdown in its sales pipeline.

Following its own strong performance in 2007, Temenos says it is raising its guidance for 2008 and says it now expects revenues of $400 million in the year, up 21% on 2007 and EBIT of $85 million, 36% up on last year.

Temenos shares were up 5.02%, or SFr1.30, to SFr27.20 in mid-morning trading on SWX following the news.

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