Co-op may be forced into £200 million IT write-off if Lloyds deal goes ahead
23 January 2013 | 5282 views | 0
The UK's Co-operative Bank may be forced to write down £200 million in IT costs if it completes its agreement to buy 632 Lloyds Bank branches.
The Co-op agreed the acquisition of the estate in July, under the proviso that the acquired branches and ATMs are operated under a long-term technology services agreement by Lloyds.
The deal could make a serious dent in the bank's profitability, says UK broadsheet, the Times, as it writes off £200 million in IT investment costs - almost as much as the Co-op Banking Group's total profits last year.
Citing un-named sources, the Times says the Co-op will have to ditch a planned migration to Infosys's Finacle banking platform, which was signed off in 2009 but has yet to take place. The bank has already spent £700 million on the switch to Finacle since buying the Britannia Building Society.
The Co-operative described the Times report as "highly speculative" and has declined to comment.