EDS Aims To Become the Largest Loan Servicing Vendor in Europe.(Brief Article)

Electronic Data Systems, Plano, Texas, has reported that its new joint venture with United Kingdom lender Abbey National has officially gotten underway, positioning it to become the largest provider of mortgage services in Europe.

The venture has officially begun subservicing a portfolio of retail mortgages with a principal balance of about 65 billion (approximately $93.6 billion) for Abbey.

EDS reported that this work, combined with its subservicing of unsecured personal loans for Abbey, officially makes the company the U.K.'s "largest third-party loan service provider" for these types of assets. A spokeswoman said that the venture also brings EDS's servicing-related work (when combined with that of its Wendover subsidiary in the U.S.) to the important $100 billion level. (It is at this level that market observers say the economies of scale in the business can be truly realized.)

Under the agreement authorizing this work, EDS will receive more than $390 million from Abbey over a 10-year period as the former provides the latter with "business process management." The joint venture is slated to handle the subservicing process electronically from the time Abbey makes the credit decision on a loan "all the way through typical loan administration."

According to EDS, this outsourcing has immediately saved Abbey about 9 million (approximately $12.9 million) per year on employment costs as the joint venture has taken over responsibility for close to 1,500 of the lender's staff members. According to Abbey, a majority of the staff affected had ...