Hewlett-Packard Co. announced a five-year, $16.5 million outsourcing deal with Trust Bank of Australia.

Palo Alto, Calif.-based Hewlett-Packard is known to bankers mainly as a computer hardware supplier, but that is gradually changing through systems management and integration deals.

Hewlett-Packard has contracted to manage the bulk of $1.8 billion-asset Trust Bank's information technology operations. The bank will reduce its staff by 30 people, or 4%.

"The decision to outsource was based on adding value to our information technology dollar," said Stephen J. Pratt, Trust Bank's general manager of electronic banking.

Mr. Pratt noted that Trust Bank is on Tasmania, an island with a small population and volatile economy. He said the Hewlett-Packard relationship will help the bank get into new lines of business that can protect it from local economic swings.

"We need to expand the bank by investing in markets like direct banking," he said.

Trust Bank has been operating on a Hewlett-Packard central processing unit since December. Mr. Pratt said this system has improved the bank's technological performance, and he is hopeful the new relationship with Hewlett-Packard will continue that course.

"Until we had the Unix mainframe, we were experiencing levels of downtime that were concerning," said Mr. Pratt. "Since then the levels of downtime have decreased dramatically."

Hewlett-Packard will design a network infrastructure and implement a system based on an Oracle data base and a combination of Microsoft Windows NT and Unix computer servers. Hewlett-Packard also will establish a common desktop environment, assuring that all users will operate on a consistent, integrated platform.

The technology relationship "will be invisible to the customer," Mr. Pratt said.

He said the Hewlett-Packard relationship should help the bank introduce new products and services, such as interactive video banking, stored-value cards, and loans by phone.

Hewlett-Packard formed its operations services division, which handles outsourcing, in 1993. The business has grown by 40% to 50% a year and has about 200 customers in 30 countries.

The company's financial industry customers include Natwest Markets Australia, Bank Julius Baer in Switzerland, and Barclays Bank in the United Kingdom.

"We offer the full range of support in Unix and NT, and integrate them to the host environment to maximize existing investment," said Doug Chisholm, industry segment manager of financial services at Hewlett- Packard.

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