Allied Irish Banks and Bank of Ireland have unveiled plans to create a joint venture technology service company, reviving talk of a possible merger between the two banks.
The new company will combine the two parties' respective IT infrastructures to provide IT services, on a commercial basis, including datacentre operations, networks and desktop management services. The company will also tout for business among other companies in Ireland and abroad.
The banks are awaiting clearance from regulators and the European Commission before proceeding with the venture, which will employ 700 people from an as yet undecided location. The company will have its own CEO and management team.
Cyril Dunne, chief information officer, Bank of Ireland says the new company will have the scale and the resources to compete for business in Ireland and elsewhere. "Its transaction levels will compare with those of major banks in Britain and Europe and it will bring together a range of skills in both organisations that stand comparison with the best in any market," he says.
Dunne confirms that the bank will have to exit its current IT joint venture with Perot Systems if the new venture gets the go-ahead.
Brian Gannon, general manager enterprise networks, AIB, says the venture will enable both companies to better control their processing costs. "We are pleased that a basis has been found for productive co-operation that does not impact on the competitive environment."
Both banks deny that the creation of the new company is a prelude to a larger tie-up or possible merger.