Analysis: Top management in new major bank [AL Sydbank] has made a massive miscalculation [forventet besparelse omkring datacentraler]

The Sydbank CEO suggested at the press conference that there should be competition between BEC and Bankdata as to who should take over the total merged customer base, but BEC has withdrawn from the tender, so AL Sydbank will find it difficult to realize their expectations for costs/savings from the merger.

They set the merger costs "conservatively" to between 1.5 and 2.5 billion DKK, but the price for withdrawing from BEC is approx. 1.5 billion DKK, so if they don’t get a discount on it (which they probably won’t do when there is no competition), then it will be difficult to stick to their expected merger costs.

At the same time, they expect to be able to save DKK 500 million. DKK annually on IT operations, which corresponds quite directly to how much AL currently pays to BEC. Then again, they are dependent on a discount from Bankdata to be able to realize the savings, which Bankdata has little incentive to provide without a bidding war against BEC.

For information, Vestjysk Bank voted through the merger today, while Arbejdernes Landsbank votes on Wednesday and Sydbank on Thursday.