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Two years ago, some financial analysts said Metavante Corp. was the only bright spot in the Marshall & Ilsley Corp. story, and Metavante was on the brink of spinning off into its own publicly traded company.
Due to a softening economy and dramatic downturn in many tech stocks, Metavante's star has dimmed. In fact, some analysts think Metavante may be holding down M&I's stock price.
However, other analysts say Metavante still adds value to its parent firm despite a recent earnings slowdown.
"Would M&I be better off without Metavante? Not necessarily," said David Long, an analyst with Robert W. Baird & Co. Inc.'s Chicago office.
For its part, M&I management says it has no plan to dispose of its Brown Deer-based provider of electronic financial transaction support and e-banking services. M&I chief financial officer Mark Furlong is upbeat about the technology company's future.
"Our advantage is having Metavante as a wholly owned part of us, and we consider it a real benefit for M&I," Furlong said.
Metavante provides services to the $30 billion-asset Milwaukee-based M&I Bank and its branches. Metavante also serves 5,100 other financial services clients in 48 states and 14 foreign Countries. Customers include the nation's top 20 banks.
Metavante's link to the parent company, as well as its extensive client list, gave it what Furlong describes as a "disproportionate contribution to M&I's market cap."
Metavante's contribution totaled no more than 8 to 10 percent of M&I's operating income two...