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Deutsche Bank (DB) Continues Revamping, To Sell IT Unit to TCS
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As part of the planned transformation and moving ahead with its job-cutting target, Deutsche Bank AG (DB - Free Report) has entered into an agreement with Tata Consultancy Services (TCS) to sell the bank’s technology services unit, Postbank Systems AG.
Bernd Leukert, chief Technology, Data and Innovation officer at Deutsche Bank said, “As part of our move to one technology organisation, we are consolidating the IT platform for our retail banking brand Postbank into the Deutsche Bank platform. TCS is already a trusted IT services partner for Deutsche Bank and this strengthens our relationship further. We are confident that TCS is the ideal owner for Postbank Systems. With this transaction, we have agreed a structure that serves all parties’ interests. It provides clarity to Postbank Systems staff and gives them the opportunity to become part of the success and growth story of TCS.”
Terms of the Agreement
Per terms of the deal, all shares of Postbank Systems AG will be acquired by TCS from Deutsche Bank. Also, 1,500 employees of the unit will join TCS.
TCS, an IT services, consulting and business solutions firm has more than 453,000 consultants in 46 countries. The Postbank Systems acquisition will boost TCS’ continued growth in Germany and in the Financial Services Industry.
However, Deutsche Bank’s plans and target of modernisation of its IT platform will be unaffected. Moreover, the latest deal will strengthen the existing relationship with TCS.
On finalisation of conditions by both parties, the deal is likely to close by the end of this year. Also, the transaction awaits certain customary regulatory and governmental approvals.
Remarkably, with this deal, Deutsche Bank moves a step ahead with its restructuring plans announced last July and expects integration costs of 120 million euros ($142.69 million).
The deal will not only help the bank save redundancy costs, but also offer long-term job prospects to the staff of PB Systems in TCS.
Bottom Line
Though Deutsche Bank is adhering to measures to revive the business and control costs, it is still plagued with several headwinds and is under the close scrutiny of investors. Also, litigation issues related to past misconducts and legal costs might impede bottom-line growth.
Shares of Deutsche Bank have gained 53.2% over the past six months compared with the 18.8% rally of the industry.
Amid the coronavirus pandemic-induced economic slowdown, several financial firms are undertaking initiatives to focus on core businesses, reduce costs and revive profitability. Therefore, these companies are adhering to restructuring with job cuts and digitization. Among others, big Wall Street biggies — Wells Fargo (WFC - Free Report) , Citigroup (C - Free Report) and Goldman Sachs (GS - Free Report) — have moved on with their plans of cost reduction through layoffs this year.
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A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Deutsche Bank (DB) Continues Revamping, To Sell IT Unit to TCS
As part of the planned transformation and moving ahead with its job-cutting target, Deutsche Bank AG (DB - Free Report) has entered into an agreement with Tata Consultancy Services (TCS) to sell the bank’s technology services unit, Postbank Systems AG.
Bernd Leukert, chief Technology, Data and Innovation officer at Deutsche Bank said, “As part of our move to one technology organisation, we are consolidating the IT platform for our retail banking brand Postbank into the Deutsche Bank platform. TCS is already a trusted IT services partner for Deutsche Bank and this strengthens our relationship further. We are confident that TCS is the ideal owner for Postbank Systems. With this transaction, we have agreed a structure that serves all parties’ interests. It provides clarity to Postbank Systems staff and gives them the opportunity to become part of the success and growth story of TCS.”
Terms of the Agreement
Per terms of the deal, all shares of Postbank Systems AG will be acquired by TCS from Deutsche Bank. Also, 1,500 employees of the unit will join TCS.
TCS, an IT services, consulting and business solutions firm has more than 453,000 consultants in 46 countries. The Postbank Systems acquisition will boost TCS’ continued growth in Germany and in the Financial Services Industry.
However, Deutsche Bank’s plans and target of modernisation of its IT platform will be unaffected. Moreover, the latest deal will strengthen the existing relationship with TCS.
On finalisation of conditions by both parties, the deal is likely to close by the end of this year. Also, the transaction awaits certain customary regulatory and governmental approvals.
Remarkably, with this deal, Deutsche Bank moves a step ahead with its restructuring plans announced last July and expects integration costs of 120 million euros ($142.69 million).
The deal will not only help the bank save redundancy costs, but also offer long-term job prospects to the staff of PB Systems in TCS.
Bottom Line
Though Deutsche Bank is adhering to measures to revive the business and control costs, it is still plagued with several headwinds and is under the close scrutiny of investors. Also, litigation issues related to past misconducts and legal costs might impede bottom-line growth.
Shares of Deutsche Bank have gained 53.2% over the past six months compared with the 18.8% rally of the industry.
Currently, Deutsche Bank carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amid the coronavirus pandemic-induced economic slowdown, several financial firms are undertaking initiatives to focus on core businesses, reduce costs and revive profitability. Therefore, these companies are adhering to restructuring with job cuts and digitization. Among others, big Wall Street biggies — Wells Fargo (WFC - Free Report) , Citigroup (C - Free Report) and Goldman Sachs (GS - Free Report) — have moved on with their plans of cost reduction through layoffs this year.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>