Commerzbank to pay HSBC €200 mn for ending outsourcing deal
By Joy Dumasia
Commerzbank, the German Commercial Bank and its Board of Managing Directors, decided to end the project for outsourcing securities settlement to HSBC Transaction Services GmbH with immediate effect. The reasons for the decision are technical implementation risks and changing market conditions. Due to the project being stopped, the Bank is anticipating an exceptional write-off of around €200 million in the second quarter of 2021.
Commerzbank reduces complexity in its transformation and will firstly continue to modernize its system landscape. The IT delivery organization of Commerzbank introduced two years ago will make an essential contribution to this. As part of its strategy 2024, the Bank has created a dedicated Key Area for Securities & Brokerage.
The transfer of positions to the systems of the subsidiary company of HSBC planned for the middle of 2021 will not be carried out. Master data already transferred and tax statements relating to securities business are moved back to Commerzbank by the beginning of 2022.
Jörg Hessenmüller, Commerzbank COO, said: “After careful consideration, we have taken the decision to stop the outsourcing project owing to the high implementation risks. The significant growth in trading volume and the ongoing technological development are allowing us to continue securities settlement profitably.”
Commerzbank is the bank for the German Mittelstand and a strong partner for around 30,000 corporate client groups and around 11 million private and small-business customers in Germany. The Bank’s two Business Segments: Private and Small-Business Customers and Corporate Clients, offer a comprehensive portfolio of financial services. Commerzbank transacts approximately 30 per cent of Germany’s foreign trade and is present internationally in almost 40 countries in the corporate clients’ business.
Recently, IBS Intelligence reported that Google Cloud and German commercial bank Commerzbank announced expanding their collaboration with a new five-year strategic partnership. Commerzbank will be moving a significant number of its banking applications to the cloud and boost the development of its cloud transformation organization.
Other Related News
September 30, 2022
Inswitch and Mastercard International partner to deliver digital paymentsRead More
September 30, 2022