Tokyo, Japan, July 25 - UFJ Bank Limited (a wholly owned subsidiary
of UFJ Holdings, Inc., TSE:8307) and Hitachi, Ltd. (NYSE:HIT, TSE:6501)
today announced the conclusion of an IT Outsourcing agreement. Under
the terms of the basic agreement outlined below, Hitachi will start
providing services to UFJ Bank on October 1 this year.
1. Outline of the Basic Agreement
Long-Term Outsourcing Agreement
||UFJ Bank will outsource the development
of systems for domestic banking operations and the operation
of these systems to Hitachi.
||10-year period from October 1,
2002 through September 30, 2012
||Approx. ¥250.0 billion over
Joint Development of Modular Computer System for Banking
UFJ Bank and Hitachi will jointly develop a mainframe banking system
made up of application modules. This will greatly simplify the addition
of new services and the provision of multi-faceted services. There
will be sub-systems designed specifically for each product and service.
Together, these advances will create a more stable, open system.
2. Other Terms of the Agreement
The long-term, 10-year outsourcing agreement, which stems from a longstanding
partnership between UFJ Bank and Hitachi, will allow UFJ Bank to pare
IT costs and continuously introduce the latest IT technologies.
Hitachi will take an equity interest in a wholly owned UFJ Bank subsidiary
Sanwa System Development Co., Ltd. This company (see the Reference)
will then be renamed and positioned as the fulcrum of Hitachi's outsourcing
UFJ Bank will sell software assets* to Hitachi Capital Corporation
(President and Representative Director: Kaichi Murata), which Hitachi
will then lease for use in its outsourcing business and for facilitating
business to other banks.
*The estimated sales price of the software, which relates to domestic
banking operations, is approximately ¥50 billion.
3. Objectives of Outsourcing
Computer systems for banking are growing in importance as a vital
social infrastructure and are also tending to become faster and more
complex in nature. These trends require systems to be more reliable
UFJ Bank has achieved the planning, development and operation of
the systems by itself and its subsidiaries. The IT outsourcing to
a leading company like Hitachi and the collaboration with it through
the IT vehicle will make possible the development and operation of
systems that are even more advanced and stable.
Risk management will also be strengthened by drawing on Hitachi's
high level of expertise.
Greater efficiency in systems development and operations from outsourcing
these functions will allow UFJ Bank to cut IT costs.
Hitachi will further develop its IT outsourcing business, which is
one of the core in its information and telecommunication businesses,
taking advantage of this outsourcing assignment of UFJ Bank's system,
one of the best of its type in Japan.
Through participating in the management of UFJ Bank's system development
subsidiary, Hitachi will gain advanced know-how in banking businesses,
and utilize it in providing other financial institutions with value-added
services, including consultation and system development.
Hitachi will aggressively promote sales of systems and software packages
to be developed through the collaboration with the UFJ Group on this
About UFJ Bank
UFJ Bank Limited, a wholly owned subsidiary of UFJ Holdings, Inc.,
is the core company of the UFJ Group, one of the four leading financial
groups in Japan. Under the holding company, the Bank was formed through
the merger of The Sanwa Bank, Limited and The Tokai Bank, Limited
in January 2002. It consists of three business lines, namely, retail
banking, corporate banking, and global banking and trading, and has
the strong franchise in Tokyo, Nagoya and Osaka areas. As of March
31, 2002, the total assets were 72.3 trillion yen, loan amount was
42.5 billion yen, and deposit amount was 53.1 trillion yen.
Hitachi, Ltd., headquartered in Tokyo, Japan, is a leading global
electronics company, with approximately 320,000 employees worldwide.
Fiscal 2001 (ended March 31, 2002) consolidated sales totaled 7,994
billion yen ($60.1 billion).The company offers a wide range of systems,
products and services in market sectors, including information systems,
electronic devices, power and industrial systems, consumer products,
materials and financial services. For more information on Hitachi,
please visit the company's Web site at http://global.hitachi.com.
Profile of the New Company
||UFJ Hitachi Systems Co., Ltd.
||UFJ Bank 51%, Hitachi 49%
|No. of employees
|Main business lines
||Planning, development and
operation of banking systems on consignment.
||Development of systems packages
for other financial institutions.
||All related work
|Change of company name
||October 1, 2002 (Coinciding with