IBM to Manage Key IT Application Development at HypoVereinsbank

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STUTTGART, GERMANY and MUNICH, GERMANY - 21 Nov 2006: HypoVereinsbank and IBM (NYSE: IBM) today signed a 3-year agreement for IBM to take over key areas of the bank's IT application development.

From January 2007, IBM Global Services will manage the modernization, standardization and ongoing development of the bank's credit applications and will work with HVB on strategic projects, developing future-proof solutions.

As part of the project, IBM is setting up a new subsidiary with a banking competence center to provide integration services in the banking environment. For HVB, this agreement marks a fundamental step toward effective and sustainable cost reductions in the bank's IT operations.

HypoVereinsbank is a member of the new UniCredit Group, a leading European financial institution with more than 140,000 employees, 7,000 branches and over 28 million customers.

HVB has bundled its IT in a subsidiary, HVB Information Services GmbH (HVB IS), covering the entire range of the bank's IT services, from consulting and application development to IT operation and services. From January 1, 2007 up to 365 of HVB IS' existing employees, who currently number around 1,800, will be transferred to IBM. Until the end of 2009 IBM will be entrusted by HVB with providing IT services as a part of the IT integration of HVB and UniCredit.

HVB COO Matthias Sohler said, "In IBM we have found a highly reputable partner for parts of our IT application development. By means of the agreement we have signed today we will be able to arrange essential capacity adjustments in our IT so as to ensure that employees have good long-term prospects. At the same time we can ensure that our IT services continue at their customary high level and realize significant synergies in IT from the merger with UniCredit."

Matthias Hartmann, General Manager IBM Germany and head of IBM Global Business Services, said, "IT migration and integration are of fundamental importance if synergy targets are to be achieved. IBM is HVB's and Unicredit Group's strategic partner for this task. This agreement emphasizes IBM's expertise in the Financial Services Sector in Europe."

The contract is subject to approval by the regulatory authorities.

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