Financial services firm ING has agreed a Euro 200m (£138m), six-year outsourcing contract with IT services firm LogicaCMG.

Under the terms of the deal LogicaCMG will manage application development, maintenance and system testing for the bank.

ING expects 350 staff to transfer to LogicaCMG. The final contract will be signed this summer.

Analyst firm Ovum says the reorganisation is expected to achieve annual cost savings of Euro 190m (£131m) for ING by 2008.

‘Larger continental businesses are actively adopting outsourcing and even offshoring, especially when their employees’ careers can be protected or enhanced, or when the casualties are sub-contractors rather than employees,’ said Douglas Hayward, senior analyst at Ovum.

Rival bank ABN AMRO also announced last week that it is planning to make savings of Euro 150m (£104m) through consolidation and the outsourcing of IT and other operations.

Some 2,400 of the bank’s clearing and processing jobs in the UK, Netherlands, US and Brazil will disappear as part of the restructure.

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