Sopra SteriaSopra Steria Group SA, a European information technology consultancy, announced that they would be carrying out transformation and implement Sopra Banking Platform for seven Sparda banks in Germany. Sparda banking group is one of the largest retail banking group in Germany, with the seven banks managing more than 2.5 million customers and around 7.7 million accounts.

The seven banks are based in Augsburg, Stuttgart, Frankfurt, Munich, Nuremberg, Regensburg and Düsseldorf and have been using a captive company to maintain and operate its shared system. Sopra plans on offering these selected banks an avant-garde of technological solutions to reduce their operating costs and upgrade to an agile, digital system. As part of the process, the captive company will be reorganized to act as a driving force of the transformation.

Sopra Steria intends to acquire a controlling stake of 51% in this captive, equivalent to an equity value of €22.6 million. The remaining 49% stake would continue to be held by the seven Sparda banks. This entity is expected to generate a cumulative revenue of more than €1 billion over 13 years, with a targeted operating margin on business activity of about 8% following an initial phase corresponding to the transformation, which would have a slightly dilutive impact on the Group’s operating margin.

This acquisition comes on the back of the recently acquired SAB, a French core banking developer by Sopra to work on its development of core banking startegies. Like SAB the captive would also serve as a springboard to gain a stronger foothold in the German retail banking segment, which is still fragmented.

The collaboration is expected to lead to an expansion in the German banking market and a rise in market share for Sopra.

by IBS Intelligence
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