Japanese Bank Outsources To IBM

Big Blue will manage and maintain servers and other IT assets for Chugoku Bank
IBM said it won a nine-year deal to provide a range of tech services to Chugoku Bank, a major, regional financial institution in Japan.

Under the deal, IBM will provide the bank with various IT services, including operation and maintenance of servers and related infrastructure. The aim is to enable the bank to improve the efficiency of operations and customer service functions, while enhancing security.

IBM also said it plans to introduce a range of best practices to Chugoku's IT operations. The contract was formally signed in October. Financial terms and other conditions were not disclosed.

Outsourcing accounts for more than half of IBM's total revenues. Sales in the company's Global Technology Services unit are holding up relatively well, given the recession and increased competition from service providers in India and other low-cost markets.

Big Blue's sales of tech services in third quarter came in at $9.43 billion, off 4.4% compared to the same period a year ago. Total revenues across all lines fell 6.9% year-over-year, while net income rose 14%.

Sales in Asia, which accounts for about 20% of IBM's revenues on a geographic basis, are also holding up, compared to other locations. The company's revenue from the region held steady in the third quarter, while sales in the Americas fell 5% and sales from Europe, the Middle East, and Africa were off 12%.

IBM shares were flat, at $126.77, in early trading Wednesday on the New York Stock Exchange. The company last week announced a debt exchange offer under which it plans to issue new, senior notes at 5.6%, due 2039.

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