IBM wins Commercial Bank of Ethiopia contract

Source: IBM

IBM (NYSE: IBM) today announced details of a $3 million (USD) deal with the Commercial Bank of Ethiopia (CBE) to support the bank in a major program of modernization and business expansion.

Under the terms of the agreement, IBM will provide hardware, software and IT services to support the bank in its rapid business growth and its shift from manual financial processes to real-time financial services.

With the new IT infrastructure, the bank plans to increase its number of accounts by 25 percent per year, launch 200 new ATMs per year and open 500 new branches over the next five years. It will also enable the bank to strengthen and extend its relationship with credit card providers such as Visa and Mastercard and roll out new mobile and internet banking services. CBE's account holders will benefit from reduced waiting times and a greater choice of banking channels and services.

The Commercial Bank of Ethiopia is Ethiopia's largest commercial bank with over two million account holders and 372 branches across the country. In recent years it has played a key role in the modernization of Ethiopia's banking sector and the launch of modern banking services. CBE was the first bank in Ethiopia to introduce ATMs in 2003 and was one of the first banks in the country to offer Visa cards in 2010.

"The Ethiopian banking sector is currently going through a major and rapid program of modernization and the Commercial Bank of Ethiopia is at the center of that work," said Mr. Bekalu Zeleke, President of CBE. "We have turned to IBM to help underpin our bank's transformation and provide the foundations for the further roll out of modern banking services for the benefit of our two million account holders across the country."

Previously the bank relied on a mixture of manual processes and IT infrastructure from HP and Sun; however, the system limited the bank's growth and plans to transform. The new IT infrastructure, which will be operational by August, is based on IBM Power Systems, IBM DS8800 disk storage system, IBM Tivoli and WebSphere software. IBM is also providing implementation and maintenance services as well as training for the baank's staff.

As a result, the bank expects to increase the performance of its systems by 50 percent while reducing operating costs by 40 percent and power consumption by 50 percent. "As the African financial services sector continues on a course of rapid transformation, IBM is working with banks to implement smarter systems that allow them to improve services to customers and strengthen their competitive position," said Tony Mwai, Country General Manager, IBM East Africa. "This is a strategic deal for IBM in Africa and supports our expansion in the fastest growing sectors and markets across the continent."

IBM has recently signed a number of other deals to provide smarter systems to the African financial services sector. For example, IBM is working with the National Microfinance Bank of Tanzania to help transform the bank's core banking systems. In Nigeria, IBM has signed deals with Union Bank, Intercontinental Bank and Finbank to deploy business analytics and service management software. In Namibia, IBM is working with the First National Bank (FNB) to provide a new core banking system based on IBM mainframe servers and in Senegal and Cameroon IBM has provided mainframe servers to the Ministries of Finance.

The deal in the rapidly emerging market of Ethiopia will help to further strengthen IBM's presence in the East Africa region as part of the company's expansion across the continent. Today, IBM has a direct presence in more than 20 African countries including South Africa, Nigeria, Ghana, Senegal, Kenya, Tanzania, Morocco, Egypt, Tunisia and Algeria.

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