- General
- November 9, 2020
- 4 minutes read
Deutsche Bank Sells IT Unit For €1
Christian Sewing, CEO, Deutsche Bank. Photo credit: Deutsche Bank German bank Deutsche Bank has announced that it’s reached a deal…
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| Christian Sewing, CEO, Deutsche Bank. Photo credit: Deutsche Bank |
German bank Deutsche Bank has announced that it’s reached a deal to sell Postbank Systems, its IT and support services unit, to Indian IT firm Tata Consultancy Services. Tata will acquire all of Postbank Systems from Deutsche Bank and absorb its about 1,500 employees. The price tag for Postbank is a symbolic €1, with Deutsche Bank taking a €120 million ($140 million) hit as a result.
Deutsche Bank has divested Postbank as part of plans to consolidate its operations and restructure its business. Last year, the company unveiled a restructuring plan that entailed slashing 18,000 jobs, with about half from Germany.
Deutsche Bank expects Postbank’s sale to be completed before the end of this year. Its acquirer Tata Consultancy Services, also known as TCS, is a major IT consulting company with over 450,000 employees and $22 billion in annual revenue. It isn’t the first time that TCS is absorbing the IT division of an external bank, given it did the same with Citigroup back in 2008 amid a global recession.
In recent years, Deutsche Bank has experienced business struggles and sought to turnaround its operations. The bank has lost a cumulative 15 billion euros over the past five years, compared to 9 billion euros in profit in the preceding five years beginning from 2010.
“We are confident that TCS is the ideal owner for Postbank Systems. With this transaction, we have agreed a structure that serves all parties’ interests. It provides clarity to Postbank Systems staff and gives them the opportunity to become part of the success and growth story of TCS,” Deutsche Bank noted in a press statement.
