Citigroup is acquiring ABN Amro’s direct custody, securities clearing, and fund services businesses in selected European and Asian markets. Upon completion, these ABN AMRO businesses will join the Global Transaction Services unit (GTS) in Citigroup’s Global Corporate and Investment Banking Group.
The transaction is expected to broaden the product capabilities and client growth opportunities for GTS, one of Citigroup’s publicly reported business units. The transaction includes ABN Amro’s domestic custody business in the Netherlands and its network domestic custody business in Russia, Greece, India, Indonesia, South Korea, Poland and Taiwan, servicing approximately 550 financial institution and corporate accounts. The transaction should add in the order of US$240bn of assets under custody to GTS’s US$7.3tn custody portfolio.
While the terms of the transaction were not disclosed, the transaction is expected to be accretive to earnings in the first year. The transaction is expected to close within the next 90 days subject to customary regulatory approvals in applicable markets.
“This acquisition will enable us to extend Global Transaction Services “solution set and servicing capabilities in key markets to meet the needs of our client base,” says Robert Druskin, chief executive officer of Citigroup’s Global Corporate and Investment Banking Group. “This acquisition also underscores Citigroup’s commitment to offer enhanced cash management, trade, fund and securities services capabilities to clients around the world, and reinforces the firm’s willingness to invest for growth in this key sector of the market.”
Frank Bisignano, chief executive of Citigroup’s Global Transaction Services business adds: “This transaction will significantly strengthen Citigroup’s market position in the Netherlands, and enhance our client delivery model across Europe and Asia with local servicing capabilities and expertise. We look forward to augmenting the expertise within our own institution with the talent and experience of the ABN Amro team as we continue to leverage on behalf of our clients an integrated global platform and embedded local market service.”
It is expected that, over time, Citigroup will combine ABN Amro’s domestic custody operations with its current Global Transaction Services operations in each of the respective markets and that ABN operational and servicing staff and management will become members of the Citigroup organisation.