FIS sees benefits from banking turmoil (Courtesy of the Jacksonville Daily Record) — As Fidelity National Information Services Inc. refocuses on its core banking technology business, CEO Stephanie Ferris said she isn’t concerned about the impact of recent high-profile bank failures.
“While recent developments have driven volatility in markets and across the banking sector, we do not expect this activity to impact us significantly in the near term, and believe FIS is well positioned to be a beneficiary of the recent disruption in the long term,” Ferris said in an April 27 conference call after FIS reported better-than-expected first-quarter earnings.
The Jacksonville-based company reported adjusted earnings of $1.29 a share, 18 cents lower than the previous year but higher than its forecast of $1.17 to $1.23.
“This outperformance was driven by a combination of both stronger execution as well as better-than-anticipated macroeconomic impacts, including consumer spending and higher levels of deposit account and transaction growth across the financial services sector,” Ferris said.
She said the number of accounts processed by FIS technology has increased since the failure of Silicon Valley Bank in March.
“As depositors disperse funds across multiple bank accounts, ultimately driving more account growth, FIS is well positioned to benefit as a leading provider of core banking technology, particularly to large financial institutions, which is the primary base of our FIS business,” she said.
FIS expanded its business beyond banking technology with the 2019 acquisition of merchant payments processor Worldpay Inc.
However, after three years of disappointing results from that business, FIS announced in February it will spin off Worldpay as a separate company.
Ferris said in the conference call that FIS is making progress on the Worldpay spinoff, which is expected to be completed in 2024.
She also said cost-savings plans announced when Ferris was promoted to CEO in late 2022 are progressing.
“I’m confident we will not only deliver on our 2023 cash savings target of $500 million, but achieve at least our $1.25 billion of cash savings target by year-end 2024,” she said.