Shares in UK risk management outfit Lombard have jumped on news of a major collateral management contract win with a top tier German bank.
The contract for Lombard's Web-based Colline product is expected to generate revenues of more than £1 million in the first year and contribute to future years.
John Wisbey, chairman and CEO of Lombard Risk, describes the deal as a "tipping point" for the Colline product, which was won in fierce competition with rival suppliers in an evaluation process which took several months.
The un-named bank - which has active operations in London, New York, Singapore and Tokyo - wanted a product capable of handling very large trade and collateral agreement volumes and straight-through processing extremely quickly, he says.
"If we can handle this bank's volumes satisfactorily, we can handle any bank's volumes," says Wisbey. "It is an excellent deal with which to start our new financial year, and we hope it will lead to a number of other similar deals."
Shares in the firm moved up 30% to a new high of 7.00 pence on the news yesterday.
Finextra verdict This is a potentially transformational deal for Lombard Risk Management. With a contract value of £1 million, the deal represents circa 10% of the firm's annual revenues. Efficient collateral management is set to be a key focus area for banks in the future and with a tier one reference site in its armoury Lombard can expect to pick up more business from major league players.