TCS all set to acquire Deutsche Bank's IT business by end of 2020

TCS all set to acquire Deutsche Bank's IT business by end of 2020

TCS all set to acquire Deutsche Bank's IT business by end of 2020

Deutsche Bank has on Monday (9 November) announced an agreement concerning the sale of Postbank Systems AG to and Tata Consultancy Services (TCS) Ltd.
As per the release by Deutsche Bank, TCS will acquire 100 percent of shares of Postbank Systems AG from Deutsche Bank AG. Around 1,500 employees of Postbank Systems will become a part of TCS.

Chief Technology, Data and Innovation Officer at Deutsche Bank Bernd Leukert said that the bank is consolidating the IT platform for its retail banking brand Postbank into the Deutsche Bank platform.

Leukert went on to add that TCS is already a trusted IT services partner for Deutsche Bank and the acquisition strengthens their relationship further. He went on to add that they 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,” Leukert said.

A report by Bloomberg said that the sale of Postbank Systems AG will be finalised by the end of this year. The decision will aid meeting Deutsche Bank CEO Christian Sewing’s job-cutting target.

Deutsche Bank will be taking a hit of 120 million euros.

The report mentioned a person briefing on the matter saying that the deal will be beneficial for the bank as it can save on the redundancy costs in the future and also offers a long-term job perspective to Postbank System staff.

In 2019, Christian Sewing announced a restructuring plan on cutting 18,000 jobs. According to the Deutsche Bank, Chief Operating Officer and Executive Director, TCS N G Subramaniam said that the company is pleased to deepen its long-standing partnership with Deutsche Bank.

He added that TCS will continue to help accelerate their digital transformation, and to acquire market specific capabilities in the banking domain.

"We warmly welcome Postbank Systems’ IT professionals into the TCS family, and invite them to avail the learning and development opportunities here, and help script the next chapter of TCS’ growth in Germany,” Subramaniam said.

Multiple sources had earlier told the Hindu BusinessLine that talks were in advanced stages and involved a complete takeover of the business and employees of Postbank Systems, the IT services unit of the retail banking division of Deutsche Bank. According to a source, talks accelerated after the onset of COVID-19 and centred around possible cost savings out of the deal.

Another source had revealed to Economic Times that the multi-year contract would help Deutsche Bank alter its technical expertise with the deal likely to be structured in a manner that TCS pays for the acquisition upfront and has a long-term technology outsourcing contract. Deutsche Bank is an existing customer of TCS and runs its Bancs software suite.