UNOFIRST, the Internet bank to be created from the merger of First-e and the Spanish-owned Uno-E, plans to become the world's first global Internet financial services supermarket. While the merger partners are still infants in the developing Internet banking market, they have strong parents in the banking and telephony sectors, particularly in Spanish and Latin American markets.
In addition, €500 million cash (£394 million) has been earmarked for initial expansion and Unofirst shareholders have the deep pockets to provide funding for any further expansion.
Expansion will be based on innovation and competitive pricing in a sector where traditional players are already suffering because of their high-cost structures.
It intends to offer a range of financial products from current accounts, low cost brokerage to flotation dealing services and a comparative shopping service for financial products. It plans to build scale rapidly, has access to a wide client base and has an aggressive programme of deals lined up to enter new geographic markets.
Whether it can achieve its ambitious plans as more Internet players enter the market and banks and telephony companies link up, remains to be seen. But the new Internet financial services company has the connections, access to capital and the technological expertise required to succeed, at the very least in Spanish and Portuguese speaking sectors.
Both Uno-E and First-e are still at early stages in offering financial products/services to customers over the Internet. First-e offers only savings accounts in the UK market but has plans to roll out current accounts and other products rapidly. It started marketing its online service last November and now claims some 110,000 registered users of which more than 50,000 are customers.
Uno-E is a start-up stand-alone Internet bank - it began pilot operations in Spain on February 14th. But it has impressive parents: Banco Bilbao Vizcaya Argentaria and Terra Networks whose main shareholder is the Spanish telephone group Telefonica.
BBVA operates in 23 countries, has 90,000 employees, total assets of €240 billion and claims more than 25 million clients. It has large market shares in Spain and in many Latin American markets.
Terra is a publicly-quoted Internet access provider to the Spanish and Portuguese-speaking world with 1.3 million customers in Spain, Brazil, Mexico, Chile, Peru, Guatemala and the US. It operates Internet portals serving those countries and Argentina and claims 38 million visits a month. It is developing online interactive solutions for advertising, marketing, e-commerce and related activities in its markets.
With this parentage, Uno-E brings access to a wide customer base, broad market knowledge, Internet experience and the important telephony link-up required to take advantage of mobile Internet access. First-e brings technology expertise and Internet banking experience.
BBVA and Terra will own 67.5 per cent of Unofirst while Enba shareholders will own the remaining 32.5 per cent. Access to further expansion funds should not be a problem - both from its majority shareholders and from the Enba shareholders which include Apax Partners, Capital Z, CGU, Morgan Stanley Dean Witter and Paine Webber Capital. And, like most emerging dot com companies, the operation plans to seek a flotation "in due course".
Unofirst intends to expand across Europe into Latin America, the US and Asia - through new subsidiaries and acquisitions in Europe and Latin America and through joint ventures in the USA and Asia. Several deals are in the pipeline and it has acquired banking licences for Latin American markets.
Initially, the merger will bring together First-e's UK operations and its pilot operations in Germany with Uno-E's fledging Internet operations in Spain. Immediate expansion plans involve Germany, Italy and France and joint venture deals in the US and Asian markets.
