Citi has acquired ING’s Custody and Securities Services business in the Central and Eastern Europe (CEE).
The business has €110 billion in assets under custody and is present in Bulgaria, Czech Republic, Hungary, Romania, Russia, Slovakia and the Ukraine. Terms of the deal were not disclosed.
Once implemented, the addition of Bulgaria will extend Citi’s custody network coverage to over 95 markets and its proprietary custody network will be expanded to 62 markets. ING Securities Services Poland was not included in the transaction.
As a result of the acquisition, Citi will offer investors, intermediaries and issuers securities services in the region through a strengthened country presence combined with access to Citi’s global banking network.
Subject to standard closing conditions and regulatory approvals, Citi and ING expect this transaction to close in the first quarter 2014.
The acquisition is a result for ING’s strategic decision to exit the region whereupon Citi entered into “on and off” discussions with the bank about acquiring the franchise, said Reto Faber, head of Direct Custody and Clearing EMEA at Citi.
ING Securities Services CEE franchise employs 130 people. Citi will take on a significant portion of that number both on the ground as well as some of the regional team. “We are now going through the details of that and the who and how we can integrate the core staff. It is important for us to have demonstrable continuity in relationships,” said Faber.
“With this acquisition, Citi has further strengthened its franchise in six important markets and has added Bulgaria to its proprietary network. We are now even better positioned to serve local and global investors, intermediaries and issuers with the best access, insight and expertise in the region,” said Sanjiv Sawhney, EMEA head of Securities and Fund Services, Citi. “We look forward to delivering the same level of exceptional service that ING has given its clients in the CEE region.”
“ING was one of the first agents to identify the region’s rich opportunities, rapidly establishing an office network that provided unparalleled geographic coverage and local expertise,” said Neeraj Sahai, head of Securities and Fund Services, Citi. “This acquisition demonstrates our commitment to continually enhance our securities and fund services capabilities and extending our leadership position in emerging markets.”
Citi has been steadily growing its securities and fund services franchise by expanding directly in markets or acquiring other businesses in those markets. In Africa it set up a direct custody and clearing franchise in South Africa last year and is currently looking selectively at other markets such has Kenya. In the Middle East, Citi is present in the United Arab Emirates and Bahrain and submitted applications to open in Qatar and Saudi Arabia.