B of I joint venture with Nova to create 500 jobs
Bank of Ireland is joining with the US card payment processing specialist, Nova Corporation, to form a new company which will offer such facilities to other financial services groups across Europe.
The new venture, EuroConex Technologies, is expected to employ more than 500 people within four years and will be based outside the Dublin region. Negotiations on a suitable location are continuing between the two companies and IDA Ireland, and these are likely to be concluded within the next couple of months.
The announcement was welcomed yesterday by the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney, who was involved through IDA Ireland in the initial discussions with Nova. "Such a partnership by a leading Irish financial institution with a leading US service provider is a positive strategy to strengthen the base of expertise and service in Ireland, while advancing a global strategy for both companies," Ms Harney said.
Nova is based in Atlanta and is the third-largest merchant service provider within the US payment processing market. It specialises in providing services to retailers and small businesses.
EuroConex Technologies will be headed by Bank of Ireland's current head of card services, Mr Billy Saunderson. Mr Edward Grzedzinski, chairman and chief executive officer of Nova, will become chairman of the new firm.
Bank of Ireland's entire credit card payment processing operation will be outsourced to EuroConex Technologies. The bank currently employs 100 people at its credit card processing centre in Dublin and these staff have been given three months to decide whether they want to move to the new company. A spokesman said staff who do not wish to relocate to the new operation will be employed elsewhere within the Bank of Ireland group.
The announcement came two days before the bank is due to announce its annual results and to give details of the progress it has made in implementing a three-year cost-cutting plan which will see the departure of 700 of its 10,000 staff. The bank aims to reduce its cost structure by €65 million (£51 million) over that period, with up to 65 per cent of these savings coming from staff reductions.
Staff affected by the cost-cutting initiative will initially be middle-management aged over 50 years, who will be offered early retirement. Staff at subsidiary companies may also be affected in the longer term as the bank is expected to centralise its banking and assurance activities and seek further voluntary redundancies.
The bank is understood to have agreed in principle the location of the new facility, but this still has to be approved by the board of IDA Ireland. A large number of potential locations have been evaluated in recent months, with the IDA seeking to attract the new company to one of the regions identified by the Government as a priority area.
Where the project is located will determine the amount of grant aid EuroConex Technologies is entitled to. Given the type of work on offer, it is likely to qualify for grants worth around £6,000 per job.
The new company is hoping to attract business from other major banking groups currently providing card payment, and to forge links with retailers and other service providers in Europe.