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Credit Suisse is poised to announce the transfer of all its telecommunications needs to BT Group in one of the biggest attempts so far by a leading bank to cut voice and data costs.
The Swiss bank is set to select BT, which is working with Swisscom as its local partner, to handle the contract, worth about SFr1.4bn ($1.8bn) over seven years. The agreement covers voice and data communications at Credit Suisse’s headquarters in Zurich, big offices in London and the US, and its extensive network of private and investment banking operations around the world.
The deal, which will involve a substantial transfer of jobs, is being watched closely by other banks. None of the companies involved would comment on Sunday, but people close to the situation said a deal was imminent.
Credit Suisse, which is being advised by management consultants Accenture, spends about SFr250m a year on its communications infrastructure, which includes linking up different trading systems and transferring data between offices. Unifying these contracts with a single supplier could save up to SFr60m a year.
The deal is part of a broader SFr2.5bn cost-cutting plan by the bank’s management, led by Oswald Grübel, chief executive, as it attempts to integrate its private banking, investment banking and asset management businesses more closely.
In the first nine months of 2006, Credit Suisse’s cost base was 72 per cent of its income – higher than many rivals. The bank has pledged to reduce this to 65 per cent over the next few years.
Other banks have been cutting costs in service functions and maintenance through outsourcing. Last year, ING Group, the big Netherlands-based banking and insurance group, shifted responsibility for tasks including providing, installing and maintaining office phones and computers to third parties.