Chase Joining EDS-Led Group Building Global 'Virtual bank.'(Chase Manhattan Corp. Joins Electronic Data Systems Corp. and Ibos Consortium)

By Marjanovic, Steven | American Banker, November 8, 1995 | Go to article overview

Chase Joining EDS-Led Group Building Global 'Virtual bank.'(Chase Manhattan Corp. Joins Electronic Data Systems Corp. and Ibos Consortium)


Marjanovic, Steven, American Banker


Ibos, an international banking consortium closely identified with Electronic Data Systems Corp., has scored a major coup with the addition of Chase Manhattan Corp.

Chase, which is planning to merge with Chemical Banking Corp., agreed with Chemical's approval to take an approximately one-fourth interest in the group, formally known as the Inter-Bank On-Line System.

Ibos, until now dominated by European banks and lacking one with Chase's global reach and money-center credentials, said the signing is a significant step toward its goal of a "seamless" high-tech network to serve the multinational needs of member banks' customers.

"We see this as a 'virtual bank' concept that can take us into the next millennium," said Charles Mallis, Chase's marketing and strategy executive for global payment and treasury services. Chase's equity stake of 24.05% - the value was not disclosed -will be equal to those of EDS, Banco Santander of Spain, and Royal Bank of Scotland.

Santander and Royal Bank, which have a close strategic alliance that includes mutual share ownership, launched the consortium five years ago. EDS, the technology supplier, bought its nearly one- third stake, soon to be reduced with Chase's entry, early last year.

The other Ibos shareholder, Goldman, Sachs and Co., will see its stake reduced to 3.8% from 5% when Chase buys in.

Speaking for Ibos, Norman McLuskie, managing director of Royal Bank of Scotland's operations division, called Chase's announcement "a remarkable advance" because the bank has "the world's largest correspondent banking network."

"This will greatly extend Ibos' global reach, particularly in North America and Asia, and will benefit our rapidly growing European network, which includes banks in eight countries," Mr. McLuskie said.

Ibos participants are able to draw on each other's electronic payment services and other banking facilities, obviating the need for branches or other direct representation outside their core markets.

Mr. Mallis said Chase views Ibos as complementary to "our own proprietary global network to help execute payment transactions quickly, securely, and efficiently."

The current Ibos association members, in addition to the equity owners, are Banco Comercio e Industria of Portugal, Credit Commercial de France, ING Bank of the Netherlands, Instituto Bancario San Paolo di Torino of Italy, Kredietbank and Credit General of Belgium, and Unibank of Denmark.

In July 1994, Ibos announced First Fidelity Bancorp. of New Jersey as its first U.S. participant. Banco Santander owns about 20% of that bank, and Electronic Data Systems is its technology operator. …

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