Bladewatch.com

http://www.finextra.co.uk/fullstory.asp?id=18723

Santander to seek £65 million IT savings in A&L takeover

Spain’s Banco Santander expects to save £180 million a year from cutting jobs and centralising IT systems as it merges the UK’s Abbey with newly-acquired high street rival Alliance & Leicester.

Banco Santander this morning announced plans to buy British lender Alliance and Leicester in an all-share deal worth £1.26 billion.

In a presentation to analysts, the Spanish bank says it expects to make £65 million savings from IT initiatives, £30 million from ‘efficiency best practices’, £25 million from operational improvements, and £35 million from central office and support service rationalisation.

I was reading about this yesterday on the BBC news site and on finextra. It was great seeing it develop as a story. As different markets change, it can be a great time to make investments and I think we’ll see more of these kind of deals in the near to medium future. Interestingly they state above that acquiring the group should enable them to save millions through integration of their IT systems, very cool.

There will be savings to be had on economies of scale alone, but through merging and integrating IT systems we can reduce the operating and support costs, certainly a hardware refresh on supported platforms, decommissioning the legacy kit, as well those data centers, those infrastructure we no longer need. There may be a period of parallel running whilst users are switched from one set of infrastructure to the other, but once that’s done, the rest of the work is at the back end, in terms of data archiving etc.

It will be interesting to watch the deal going forward, to see if there are any other interested parties, there’s more commentary on reuters.

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