Sanchez Computer Associates Inc. seems poised to reap the rewards of two complementary trends in banking-outsourcing and the Internet-analysts say.

The Malvern, Pa., company revealed last week that its E-Profile unit is the primary supplier of technology to, the Internet offshoot of Bank One Corp.

The relationship was disclosed in Sanchez's financial report for the second quarter. Details of the outsourcing contract were not disclosed.

(In its report, Sanchez said second-quarter revenues totaled $13.9 million, up 26% from a year earlier, and net income rose 6%, to $1.8 million.)

Wingspan is the direct bank that Bank One's First USA unit introduced June 24. E-Profile is the new name Sanchez gave to Artech Financial Services Inc., a data processing company it bought in February.

The E-Profile data center runs Sanchez's Profile/Anyware client/server software, which was designed to process banking transactions that occur across multiple delivery systems, such as the telephone, Internet, and branch.

Sanchez now is targeting top-tier banks for outsourcing, promising them a quick, affordable entry with scale economies in the processing of core banking transactions, particularly in a multiple delivery-channel environment.

"We think that is a dramatic new play for the E-Profile side of our business," said Ronald J. Zlatoper, Sanchez's chief executive officer.

The company expects to announce another major direct banking contract in the third quarter and has five more in the 1999 sales pipeline, he said.

E-Profile is on a fast track to be spun off as a publicly traded company, analysts said.

Under a best-case scenario, the unit's revenues could exceed $1 billion in 2001, according to Charles Wittmann, an analyst at First Union Capital Markets. That would be a "phenomenal" rise from its anticipated $30 million in 2000, he said.

He estimated that E-Profile could be processing the Internet banking transactions of 243 million customers within the next few years.

That figure includes those served by Citigroup's e-Citi initiative and the direct banking programs of ING Group of the Netherlands.

Mr. Wittmann has reiterated his strong buy on Sanchez and raised his 12- month price target to $75 a share. Four other analysts have the same rating on Sanchez, and one has a moderate buy. The company's stock closed Friday at $46.75, down $4.1875 for the week.

Sanchez represents a formidable challenge to traditional outsourcers such as Fiserv Inc. and Marshall & Ilsley Corp.'s M&I Data Services, Mr. Wittmann said. Those vendors also are targeting the emerging Internet outsourcing market. Fiserv said Friday that it would be supporting American Express' Membership Banking service, which was announced Thursday.

Though Fiserv, M&I, and other top technology vendors are beginning to sell client/server products, their bread-and-butter services are still tied to traditional mainframe-based computing, Mr. Wittmann said.

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