Dutch bank ABN Amro is to outsource its global IT operations to US and India, cutting 1,500 jobs in the process.
ABN Amro is the latest European bank to outsource IT functions
In a 1.8bn euros ($2.2bn; £1.2bn) deal, ABN Amro will hand the management of its core IT systems to US company IBM.
It will also outsource support and development functions to four companies including three Indian firms, Patni, Infosys and Tata Consultancy Services.
The five-year deal, which follows an eight-month business review, will save the firm about 260m euros a year.
The bank has been striving to reduce costs to improve its competitiveness and is cutting a total of 2,850 jobs.
The IT agreement - also involving US firm Accenture - will result in an estimated 1,500 job losses over the next eighteen months.
A further 2,000 staff are expected to transfer from the Amsterdam-based firm to its five suppliers, principally IBM.
About 700 employees in the Netherlands will move to IBM while staff in the US and Brazil will also be affected.
The outsourcing deal is part of a widespread efficiency programme in which the bank hopes to cut annual costs by 600m euros from 2007.
ABN Amro said the agreement would enhance its competitiveness.
"The agreements with selected vendors allow us to utilise the latest technology to further improve the services we offer our clients," said Hugh Scott-Barrett, the bank's chief operating officer.
Under the terms of the deal, IBM will take responsibility for managing ABN's global IT infrastructure.
Infosys and Tata Consultancy - both headquartered in Bangalore - will oversee software maintenance while responsibility for software development will be shared by IBM, Accenture, Patni, Tata and Infosys.
Infosys said the deal was a hugely significant one for the company.
"This deal clearly indicates that large offshore players like us have a competitive business model to deliver large, global, multi-year contracts," said Nandan Nilekani, its chief executive.
"The deal also signifies a trend towards strategic global sourcing, where customers are selecting multiple vendors to help improve efficiencies in their IT service delivery."
ABN Amro previously outsourced about 2,000 technology jobs to US firm Electronic Data Systems in 2003.