Moving swiftly to slash expenses at its newly acquired Connecticut franchise, Chase Manhattan Bank will turn over the unit's computer operations to a subsidiary of International Business Machines Corp., it was announced Thursday.
The $2.2-billion asset Chase Manhattan Bank of Connecticut was formed in August when Chase acquired two insolvent financial institutions, Citytrust and Mechanics and Farmers Bank, from the Federal Deposit Insurance Corp.
Support and Service Deal
Chase signed a long-term "outsourcing" agreement with the IBM unit, Integrated Systems Solutions Corp., for computer systems support and service.
The deal will reduce the banks' technology expenses by 30%, said Philip Giaquinto, senior vice president for regional bank operations and systems at the parent Chase Manhattan Corp.
Jobs for 30 from Citytrust
Integrated Systems will combine and manage the data processing operations of the two banks at an IBM facility in Southbury, Conn. The unit will offer jobs to about 30 employees, most of whom were technical employees of Citytrust. Mechanics and Farmers Bank used a data processing service bureau before the acquisition.
The value of the contract was not announced.
Growing List of Deals
Integrated Systems will run the banks' technology operations, including network management and data center operations, and provide applications development and disaster recovery services.
Integrated Systems has bagged several outsourcing agreements with banks since it was formed this year. The unit has a preliminary agreement to take over the technology operation of Continental Bank, Chicago. It also recently reached agreement with Kansas City, Mo.-based Commerce Bancshares Inc., a $6.4-billion asset holding company.