RUSSIA - ING Bank (Eurasia), Russia’s largest custodian bank, has acquired Credit Suisse First Boston’s custody business in Russia
The acquisition adds 140 clients to ING Bank (Eurasia)’s existing client base of 300 - an increase of almost 50% - and boosts assets in custody by $2bn (€2.5bn) to $18.2bn.
CSFB said it had sold its Russian custody business as part of a strategy of focusing on global business. “The divestiture is consistent with CSFB’s programme of strategic business rationalisation,” says Brady Dougan, managing director and global head of CSFB’s securities division.
One of the attractions of the acquisition to ING Bank (Eurasia) is the CSFB client base. More than 90% of CSFB’s clients are western investors, compared with 60% of ING Bank (Eurasia)’s clients ING will now be providing custody services for the bulk of foreign investors in Russia.
Cheaper and faster settlement was another attraction. Michael Pernetti, head of general banking ING Bank (Eurasia), says: “Settlement between clients in different nominee structures is costly, and it’s been very hard to lure investors from one custodian to another. Having all these clients in one nominee structure allows for same-day settlement of shares in cases where these clients trade with each other.”
ING Bank (Eurasia) will also acquire CSFB’s specialised depository business, with mutual fund and pension fund assets totalling between $300m and $400m. ING gained a specialised depository licence last year, which allowed it to hold assets in these funds.
ING sees possibilities in the Russian pensions market, as the government accelerates the pace of pension reform. Pernetti said ING planned to launch its first pension fund in the next few months.