State Street sees an opportunity to cut costs by moving some of its processing operations to eastern Europe, says chief executive Ron Logue.
“We see eastern Europe as two different types of opportunity,” Logue told Bloomberg TV. “One is in terms of product manufacturing, processing at a lower factor cost than in some areas in Western Europe.
“So there’s an opportunity to move operations to some Eastern European countries – to, again, work on the efficiency and expense side of the balance sheet.”
“Over time, these markets in and of themselves will be very legitimate markets, where we will have an infrastructure that we will put in place, because of the processing desires there,” said Logue.
He believes markets there would grow. “I think they’ll become an extension of what’s happening in western Europe and we need to be there.”
A spokesperson said that there
were no plans in place and that Logue was just talking about potentially moving processing – not moving jobs but “creating capacity for future growth”.
In terms of custody industry consolidation, Logue said: “We definitely will be a buyer instead of a seller and I think we’ve proven to ourselves and the market that when we buy we know how to acquire well and integrate.”