The bank was able to maintain a degree of flexibility in its outsourcing arrangement with EDS and the contract was repeatedly updated.

"Outsourcing contracts evolve and change during the life of the deal anyway," they added.

As far back as the year 2000 the bank was carving up its IT operations into key areas - mainframes, telecoms, data center operations and applications/software development.

At that time the bank inked a groundbreaking A$500 million contract with the Telecom Corporation of New Zealand. It was resigned five years later and is due for renewal in October 2007.

The bank is building a new data center in Sydney's north-west and has been busy ramping up its in-house application capabilities for the past 18 months.