| At Easter 2008, Sampo Bank in Finland migrated to the Danske Bank Group’s shared IT platform. The migration involved nearly 1.2 million customers and 121 branches. Later in 2008, the Group expects to change Sampo Bank’s legal status from a subsidiary to a branch of Danske Bank A/S.
In the first weeks after the migration, there were a number of unexpected system challenges that resulted in regrettable inconveniences for customers in connection with online banking and card transactions, for example, but IT operations are now stabilising.
After the migration, the Finnish bank’s product range now matches that of the rest of the Group, while the bank has maintained the high level of Finnish electronic services. New, streamlined administrative procedures and business processes have also been implemented. The shared and scalable platform is essential for achieving economies of scale and thus further profitable growth.
For customers, the migration means new and improved products at competitive prices as well as a change in the visual identity and branding.
The migration of Sampo Bank in Finland will lay the foundation for realising planned synergies. Of the annual cost and funding synergies of DKr0.6bn, DKr0.1bn was realised in 2007, and the Group expects to realise DKr0.4bn by the end of 2008 and the full amount by the end of 2009.
Generally, the migration gave rise to greater system challenges than expected. The requirements for program complexity and scalability increased the scope of the migration. As a result, the Group expects to have expensed integration expenses for Sampo Bank equal to the total integration budget of DKr1.6bn by the end of this year, including the capitalisation of development costs of DKr0.3bn. Sampo Bank in Finland is now on the Group’s shared IT platform. Future development of the platform will enhance and support the IT functionality of Sampo Bank, the smaller Baltic banks and the Group in general. The Baltic banks will migrate to the shared platform over the course of 2009, and the Group expects to be able to keep expenses for this migration within its ordinary IT budget limits.
The growing strain on development resources and the subsequent rise in integration expenses do not, therefore, affect the Group’s total cost estimate. |