Gjensidige has signed a final agreement with EDB to purchase IT solutions and operating services for its new banking operation, Gjensidige Bank.
The contract represents total business volume of around NOK 150 million based on the bank's estimated future business volumes. Gjensidige Bank will open for business from the start of 2007.
EDB has already announced, in a stock exchange announcement dated 18 October 2006, that the parties have signed a letter of intent with the objective of entering into a final agreement. Gjensidige and EDB have now agreed on the final terms of the agreement, which will run from 1 January 2007 to 31 December 2011.
This agreement makes EDB a crucial collaboration partner in the establishment of the new bank. EDB is to supply a comprehensive state-of-the-art portfolio of solutions and infrastructure to provide the basis for Gjensidige Bank's activities. The operating services and solutions provided by EDB will support the new bank's cost-effective operations. The banking technology that Gjensidige Bank will use will be based on a range of self-service solutions supplied by EDB. Solutions account for around 60% of the overall contract with EDB, with IT Operations services making up a sizeable 40% of the total delivery. Revenue from sales of solutions will be recognized with effect from the first year of delivery, while revenue from IT Operations will depend on the pace of growth of the new bank's customer base.
"The agreement with EDB is key to ensuring that Gjensidige Bank will offer efficient, high quality services from the very first day of business. EDB's extensive experience as a strategic business partner, its competitive prices and reliable operating services, together with its ability to develop up-to-date solutions, were essential factors in our choice of supplier", comments Jan Kaare Hellevang, Managing Director of Gjensidige Bank.
"Setting up Gjensidige Bank is a very challenging and exciting project. We see Gjensidige's decision to use EDB as its supplier as a vote of confidence, and it confirms that our solutions and in-depth expertise in banking technology lead the market", comments Petter Idar Jenssen, EVP Bank & Finance, EDB.
New bank to open at the start of 2007
Gjensidige Bank will open for business with existing customers of Gjensidige Forsikring and new customers from January 2007. Gjensidige's objective is for the bank to quickly establish a significant position in the Norwegian retail banking market.