ITALY/LUXEMBOURG - State Street Corporation has strengthened its presence in the securities services markets in Italy and Luxembourg with the acquisition of Intesa Sanpaolo's Securities Services (ISPSS) business.
The €1.28bn transaction will improve State Street's position as the largest investment services provider in Italy, as it takes on the custody, fund administration, depositary bank and correspondent bank business of ISPSS.
However, the terms of the transaction also include a long-term service agreement with Intesa Sanpaolo for State Street to service its investment management affiliates, including Eurizon Capital, the largest investment manager in Italy with approximately €139bn assets under management.
ISPSS' businesses in Italy and Luxembourg have approximately €369bn in assets under custody, which will be transferred to State Street along with approximately €9bn in cash deposits. Although State Street, which has $19trn (€15.3trn) assets under custody and administration and $1.9trn assets under management globally, will support the ISPSS balance sheet with approximately €450m of additional capital.
Jay Hooley, president and chief executive of State Street, said: "This acquisition marks a significant step forward in positioning State Street for continued expansion in high growth markets and providing comprehensives servicing solutions for our global clients."
The completion of the State Street deal is part of a growing trend of consolidation in the Italian custody market, as it follows the €93m sale of Unione di Banche Italiane's depositary banking business to RBC Dexia in September last year. In addition BNP Paribas announced last month that it had signed an agreement to buy the depositary banking services of Banca Popolare di Milano (BPM) for €55m.
For further insight on the Italian securities services sector see the June edition of IPE.
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