The part of Nordea IT production to which this agreement applies represents an annual cost base of EUR 330-340 million including investment related expenses of EUR 30 million during the fourth quarter 2003. When the transformation is completed the partnership hopes to bring significant cost savings to Nordea. In terms of absolute costs there will be a slight decrease during the next three years despite important transformation investments and volume growth.

"This partnership will facilitate a large transformation process to centralise our IT production, and thereby reduce IT costs while enabling us to focus more strongly on core business," says Markku Pohjola, Deputy Group CEO and Head of Group Processing and Technology.

As part of the solution, Nordea and IBM are forming a single-purpose joint venture, which will employ about 900 employees from Nordea starting November 1, 2003. The jointly staffed Transformation and Innovation Center aims to help Nordea realize additional cost savings and performance improvements.

The agreement moves Nordea from a fixed IT production cost structure to a model where Nordea pays only for use of the systems and technology provided via IBM's on-demand services. A number of technological platforms will be consolidated into one location, and networks and desktops will be standardised. IBM will deploy an environment that automates many tasks associated with key IT functions, such as resource provisioning, asset tracking, workflow scheduling, and real-time infrastructure monitoring.

"IBM on-demand solution will enable Nordea to better align IT production costs with business volumes," says Dominique Cerutti, General Manager IBM Global Services, EMEA.