GERMANY - Ron Logue, president and chief operating officer of State Street Corp., has championed the bank's decision to buy Deutsche Bank’s global securities services business, calling it a ‘perfect’ fit.
He pointed out at a function in Frankfurt that the US bank had been acquiring books of business since 1995. “We have also been active in Germany for the past 30 years.”
State Street bought Deutsche’s global custody business in November for up to 1.5 billion dollars. The move took it to the top slot in the industry with around eight trillion euros under custody.
Logue said there was a real opportunity to bring a more competitive level of services to the German marketplace as a result of this acquisition and participate in the significant growth seen for the European market. “With Deutsche’s business joining ours, we can accommodate that growth.”
Comparing the two organisations, Logue felt they both had “high levels of customer contact”, which augured well for gaining significant market share in Europe. He described as ‘perfect’ the fit between the Deutsche business and State Street’s in Europe.
Logue said he regarded the relationship that was developing with Deutsche more as a partnership, pointing to the 10-year agreement to handle the assets of Deutsche Asset Management and to use the sub-custody network of Deutsche where appropriate.
He said State Street had been impressed by the loyalty of Deutsche’s customers in Germany, which he said was because they had been looked after by staff who cared about them. It was up to State Street to win the trust of Deutsche’s clients in investment servicing.
Both sides were working on an integration plan, he said. “I am confident that we will execute a swift and seamless integration, while maintaining high standards of client service.”
Thomas Bergenroth, senior vice president with State Street in Munich, called the deal “a once in a lifetime opportunity for State Street and at the same time will dramatically change the industry landscape. The opportunities are here.”
He added: “We know that pension reform will continue to play an important role in the evolution of the investment industry. In Germany, the Riester reforms present an opportunity in this regard.”
Referring to the EU directive on pensions, he said that while it still awaited European Parliament approval, it provides “a promising step towards addressing the need for pension reform and harmonisation”.
Boston-based State Street has 707 billion dollars in assets under management and 59.8 billion dollars in European pension fund assets under management.