Fundtech Ltd. (Nasdaq: FNDT; TASE: FNDT) is a beneficiary as large international banks begin investing again in their IT systems, a year after the collapse of Lehman Brothers. The Israeli developer of global transaction banking solutions today announced that Bank of America Merrill Lynch Inc. (NYSE: BAC) has selected its new Global PAYplus-Services Platform.
Although Fundtech did not disclose the size of the deal, CEO Reuven Ben Menachem noted the new contract along with three other large contracts, when he said, "We added a large global bank, on top of Citibank, HSBC, and Barclay's Bank. We believe that it will be a major client for us in the coming years."
Market sources believe that the multiyear contract with Bank of America Merrill Lynch could initially generate millions of dollars of revenue for Fundtech, and that the amount could reach tens of millions of dollars in the future. Fundtech's Global PAYplus-SP will underpin the bank's next-generation on-line treasury management banking platform, and will come on line during the second half of 2010. The system will enable Bank of America Merrill Lynch customers to personalize their banking relations.
In an unusual move, Bank of America Merrill Lynch also announced the contract with Fundtech, which quotes Bank of America Merrill Lynch Global Corporate Banking e-Commerce executive Cindy Murray as saying, “This payments services hub is a critical component in transforming the payment capabilities at Bank of America Merrill Lynch. We will be able to drive integration among common payments processes, react more swiftly to evolving standards and regulatory changes, and leverage our payments capabilities to gain efficiencies for both clients and the bank."
At the same time that Lehman Brothers collapsed in September 2008, Bank of America acquired financially troubled Merrill Lynch, the largest US investment bank at the time. The merged bank now serves 53 million customers through 6,000 branches in 150 countries.
Fundtech closed at $9.61 on Nasdaq yesterday, giving a market cap of $147 million. The share rose 1.9% by midday on the TASE today to NIS 38.01. Nochi Dankner's IDB Holding Corp. Ltd. (TASE:IDBH) unit Clal Industries and Investments Ltd. (TASE: CII) owns 55.4% of Fundtech, and Cannell Capital LLC owns 9%.
Published by Globes [online], Israel business news - www.globes-online.com - on September 14, 2009
© Copyright of Globes Publisher Itonut (1983) Ltd. 2009