BB&T Corp. has joined the list of regional banking companies considering outsourcing certain jobs to foreign countries - a practice that has been largely used by bigger, more global competitors.
Bob Denham, a spokesman for the $107 billion-asset Winston-Salem, N.C., banking company, said it is looking at using foreign outsourcers to fill additional jobs in its information technology operations. He provided few details in an interview last week, though he said BB&T is working with some offshore providers and should have a decision by the end of the quarter.
SunTrust Banks Inc. is evaluating whether to boost its foreign work force. It now has 50 workers in India who handle application development and maintenance.
"It's likely that the number may grow as we see opportunities where it makes sense," said Mike McCoy, a spokesman for the $170 billion-asset Atlanta company. "But there's no scenario under which it would involve more than a fraction of the total positions at SunTrust."
Washington Mutual Inc., which has no international operations, has been talking about stepping up its use of foreign back-office functions.
Steve Rotella, the president and chief operating officer of the $334 billion-asset Seattle thrift company, said during a November meeting with investors that it would "rapidly grow" its offshore platform this year. He did not discuss the size of those operations, nor did he say how it would expand.
Alan Gulick, a Wamu spokesman, wrote in an e-mail Tuesday, "We have a handful of vendors in three countries - Canada, the Philippines, and India - that perform IT, quality assurance and testing, application development, back-office, and maintenance work for us." He said he had no further details about Wamu's plans to expand its offshore operations.
Analysts said it makes sense that more banking companies and large thrifts would aggressively explore foreign outsourcing, despite having little or no foreign operations. Some analysts predicted that such companies would lead the next wave of offshoring as a way of containing expenses.
Pawan Verma, the director of the U.S. outsourcing advisory practice at PricewaterhouseCoopers, said in an interview Tuesday that the accounting firm is working with several regional banking companies on offshoring.
"They recognize that this is a competitive necessity," he said. "It is truly a transformational process."
Kevin Reynolds, an analyst at Stanford Group Co., said some degree of offshoring would make sense for banking companies with more than $50 billion of assets. "It's reasonable to see more of it over time … but I don't think you'll see a massive flood of offshoring in 2006."
Offshoring is still the forte of the largest U.S. banking companies. The $1.5 trillion-asset Citigroup Inc. has handled IT development out of India for more than two decades. The $1.3 trillion-asset Bank of America Corp. has a 1,500-employee Indian unit, Continuum, that provides back-office processing for customers of the Charlotte company's global commercial and investment banks.
The $532 billion-asset Wachovia Corp. of Charlotte, which is looking to trim annual expense growth by up to $1 billion, recently signed a seven-year deal with Genpact, a former Delhi unit of General Electric Co., to handle some back-office processing.
JPMorgan Chase & Co. has taken a slightly different tack and has hired foreign employees. Last month it said it expects nearly one third of its investment bank's operations jobs - about 3,000 employees - to be in India by 2007.
BB&T spent considerable time grappling with offshoring. During a conference call to discuss its third-quarter 2004 earnings, John A. Allison, its chairman, president, and chief executive, said offshoring might be an option as it sought to eliminate $60 million of annual expenses.
At that time Mr. Allison said BB&T had hired a consulting firm to evaluate its call centers and "compare them to the possibility of moving internationally." However, he said that its call centers were in rural markets and, from a value perspective, were "superior" to competitors' foreign centers.
Mr. Denham said in his interview last week that for now BB&T is not considering any plans to move call-center jobs outside the United States, nor does it plan to displace its workers with foreign labor.
BB&T is tweaking some of its U.S. operations. It divided its Atlanta region last week, and it is acquiring Main Street Banks Inc. in Atlanta. The $623 million deal is set to close next quarter.
On Tuesday, BB&T said that Tasia Katapodis would oversee the north Atlanta region, while Bobby Blakley will lead its south Atlanta region. Ms. Katapodis and Mr. Blakley had been Atlanta area executives. They will report to Lars Anderson, the company's Georgia state president and the former president for the Atlanta region.
