Spanish bank Banco Santander has pulled out of its multi billion pound agreement to take over 316 Royal Bank of...
Scotland (RBS) branches, and the customers associated with them, because of IT integration problems.
But sources say that IT problems can always be sorted out and the claims might be an excuse to pull out of the deal.
Partly-nationalised RBS has been forced to sell assets by the government, after being saved from collapse during the bank rescue package in 2008.
Banco Santander is no stranger to huge projects to migrate customers to its system. It gains huge advantages by standardising its operations on its Partenon core banking platform. Acquisitions in the UK – including Abbey and Alliance & Leicester – were migrated to the platform.
Chris Skinner, chairman of the Financial Services Club, said that RBS has claimed all the data has been separated and it is a case of putting it on Banco Santander’s core banking platform Partenon.
He said an Accenture report has revealed that the migration of the retail customer details will take until 2014 and business customers 2015. “They could be making excuses not to go ahead with the deal,” said Skinner.
The banks made the agreement in August 2010. A year later, a new target completion date for the final quarter of 2012 was set. While not commenting on IT directly, Banco Santander said in a statement, that integration targets would not be met: “It is now apparent that this revised target will not be achieved.
“Santander UK confirms that it has therefore notified RBS that it does not believe the conditions to the transfer of the business from RBS to Santander UK will be satisfied by the agreed final deadline of February 2013, and that it is not willing to agree a further extension to that deadline.
"In that case, the agreement will automatically terminate in accordance with its terms and the transfer of the business to Santander UK will not take place."
Banco Santander had a strategy to grow by acquisition and integrate the IT operations of the firms it buys to Partenon, which uses in-house middleware called Banksphere.
As well as rationalising IT, this creates cross-selling opportunities, improves customers satisfaction and operational performance. The platform uses a single database so all of a customer's relationships with the bank are automatically linked through a single view of customers.
Santander bought Abbey in 2004 and acquired Alliance & Leicester in 2008. It set a target of £300m cost savings after integrating Abbey with Partenon and it planned to make efficiency savings of between £30m and £50m by integrating Alliance & Leicester with its core banking system.