Citigroup is pondering the acquisition of State Street. Or so reported the Boston Globe earlier on Wednesday of this week, sourcing it to speculation by an analyst at RBC Capital Markets who maintained that the giant American financial services group wished to enlarge its presence in the securities services industry. State Street has appeared more vulnerable of late, as a combination of a lower share price, falling stock markets and the distraction of digesting Deutsche GSS has obliged the Boston-based bank to embark on measures designed to cut costs by $125 million.
Shares in State Street rose as when other analysts issued notes reinforcing speculation that the bank could be acquired by Citigroup. “We think Citigroup will buy State Street,” said Hoefer & Arnett analyst Richard Bove in a note issued Tuesday, according to Reuters. Meanwhile, Fox-Pitt, Kelton analyst Jon Balkind cited Citigroup’s plans to expand its custody and transaction processing businesses as the source of his speculation (he also said that State Street could be worth $50 per share to a buyer, valuing a sale at $16.6 billion.