Geneva, Switzerland – April 1, 2016 – Temenos (SIX: TEMN), the software specialist for banking and finance, today announces that the combined EFG International and BSI group – one of the largest private banks in Switzerland with around CHF170bn in AUM – will centralize its IT operations using EFG’s core banking platform, T24 from Temenos.
In the first announcement about the proposed merger, made on February 22 this year, management laid out plans to achieve cost synergies of CHF185m, noting that more than half of this amount would come from combining IT systems. In a further announcement made yesterday, management gave additional detail about these synergies, stating that IT synergies would amount to CHF100m of the CHF185m and would arise from moving the BSI operations onto EFG’s core banking platform, T24 from Temenos. The migration is to take place by the end of 2017.
EFG International has been a long-standing Temenos customer, with significant experience integrating acquisitions on its IT platform. Since 1993, when it went live on its Temenos core banking system, EFG International has made and successfully integrated the IT and operations of more than 20 acquired banks, enabling it to extract significant IT cost synergies. In addition, running a packaged and upgradable core banking system, which serves all of its international operations from a centralized hub, has enabled it to generate significant economies of scale from organic and inorganic growth. Today, EFG International spends less than 6% of total costs on IT, roughly one-third of the average for European private banks.
Commenting on the news, CEO David Arnott said,
“The Swiss banking marketplace is consolidating and having a scalable, low cost IT platform will become an increasingly important competitive advantage. EFG International’s record in this regard is exceptional, having integrated multiple acquisitions onto its centralized platform and, as a result, operating with one of the best IT efficiency ratios in the industry – or, in this case, at approximately half the IT cost of BSI with roughly the same level of AUM. In this light, it makes perfect sense to move the BSI systems onto the EFG platform and we will provide all support needed to ensure the migration takes place successfully and in line with the proposed timeline.”