Deutsche Bank in Talks with Tata to Offload Tech Unit
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Deutsche Bank is reportedly in advanced talks to sell its technology services unit to India’s Tata Consultancy Services.
Tata Consultancy Services – Asia’s biggest software exporter and the tech subsidiary of Indian conglomerate Tata group – could take over Deutsche Bank’s Postbank Systems, according to a «Bloomberg» report citing unnamed sources.
There are expectations for a deal to materialize by year-end though negations are ongoing and no conclusions have been made.
If successful, Tata Consultancy would onboard Postbank System’s 1,400 employees while Deutsche Bank would come closer to its restructuring target to reduce 18,000 jobs.
The Bonn-based technology unit generated revenue of 533 million euros ($629 million) in 2015, the latest annual figures available.
Bottom lines aside, the bank is currently focused on importing Postbank’s operational capabilities by merging with its technology in a move that would render Postbank System’s obsolete by 2021-end and shed 1 billion euros ($1.18 billion) of operational costs, the report added.
Questions & Answers
Q.What is the primary motivation for Deutsche Bank to sell its Postbank Systems unit?
What is the primary motivation for Deutsche Bank to sell its Postbank Systems unit?
Deutsche Bank aims to offload its tech unit as part of a larger restructuring plan. This move would help them reduce their overall workforce, moving closer to their target of 18,000 job cuts.
Q.How many employees would transfer to Tata Consultancy Services if the deal proceeds?
How many employees would transfer to Tata Consultancy Services if the deal proceeds?
If the deal is successful, Tata Consultancy Services would take on all 1,400 employees from Postbank Systems. This transfer is contingent on the ongoing negotiations being finalised by year-end.
Q.What was the last reported revenue for Postbank Systems?
What was the last reported revenue for Postbank Systems?
The latest available annual figures from 2015 show that the Bonn-based technology unit, Postbank Systems, generated revenue of 533 million euros. No more recent figures are provided in the article.
Q.What is Deutsche Bank's alternative plan if the sale of Postbank Systems does not materialise?
What is Deutsche Bank's alternative plan if the sale of Postbank Systems does not materialise?
If the sale does not proceed, Deutsche Bank plans to merge Postbank's operational capabilities with its own technology. This would render Postbank Systems obsolete by the end of 2021 and save 1 billion euros in operational costs.
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