Santander has said it will surpass the £65 million IT savings targeted in its acquisition of Alliance & Leicester.
When the Spanish bank bought A&L last year for £1.26 billion, it said IT standardisation would play a central role in the merger and in delivering better efficiency.
In the 13 months since the acquisition, it has been moving A&L customers onto its in-house platform, Partenon, which is Microsoft-centred and sits on an IBM database. It has also been integrating back office functions.
A&L’s migration was “on-schedule” for completion in November 2010, it said in a statement to investors, as it announced first half results at the end of July. The £65 million saving for A&L in 2009 “will be surpassed”, it said.
Santander is also targeting £30 million savings from “efficiency best practices”, £25 million from operational improvements, and £35 million from central office and support service rationalisation after the A&L acquisition.
Separately, two million customers from Bradford & Bingley are also now on Partenon, after Santander bought the branch and savings part of the business last year for £612 million.
Observers had anticipated a particular challenge in dealing with the Bradford & Bingley IT systems. In 2008, newspaper the Financial Times blamed B&B’s “hopelessly antiquated” IT, outsourced to IBM, for failing to provide proper visibility of the company. But the move to Partenon, at least, was completed on time.
The integration of both A&L and B&B onto Santander’s Partenon system follows the integration of Abbey, which was bought by Santander in 2004 and is now largely running on the platform.
In March, Santander signed a €100 million (£93 million), two year IT services deal with Accenture to help it handle the IT integration projects following the acquisitions. At the time, the bank did not comment on whether the services deal was focused on ensuring the integration is completed on schedule.