Merrill Lynch IT boost for Bank of America

Bank of America is expected to retain many of the IT systems and IT employees at Merrill Lynch following its emergency takeover of the troubled investment...

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Bank of America is expected to retain many of the IT systems and IT employees at Merrill Lynch following its emergency...

takeover of the troubled investment bank this week.

The US bank agreed a $50bn deal to buy Merrill Lynch which has around 8,000 employees in EMEA, including around 4,500 employees in UK, on Monday.

Bank of America has targeted $7bn in savings by 2012 from the take-over, and is expected to integrate overlapping technology.

However, Merrill Lynch's IT systems and IT specialists could prove a strategic buy for the US bank.

According to industry observers, Merrill Lynch has a global infrastructure that will allow Bank of America to build its business outside the US.

Ralph Silva, analyst at Towergroup, said there was no reason why both banks should keep all their IT systems running.

But the acquisition gives Bank of America access to new technologies.

"Merrill Lynch operates in so many areas that it has many applications that the Bank of America does not have," Silva said.

Merrill Lynch spent $1.121bn on IT and comms in the six months to June this year. It said in its most recent financial results that one of its strategic priorities was to "continue to invest in technology to enhance productivity and efficiency".

Robert Morgan, director at supplier outsourcing consultancy Hamilton Bailey, said, "Bank of America will want to integrate as many systems into its own infrastructure as soon as possible but it will be acquiring some major IT systems that it does not currently offer in its financial services portfolio, so conventional IT will be assimilated and jobs lost, but for specialist IT services it will need to retain the staff."

Financial turmoil to trigger IT consolidation >>



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