ITS, the German transactions bank created by HSBC Trinkaus & Burkhardt, the Dusseldorf-based arm of HSBC, and T-Systems, the IT in-sourcing division of Deutsche Telekom, has secured a major mandate from HypoVereinsbank (HVB).
HVB, whose DAB direct banking subsidiary is already a client of ITS, has now expanded the relationship with the transactions bank to include securities transactions generated by clients of its private banking business. “We will manage the securities processing of the retail and private banking arm of HVB,” explains an ITS spokesman.
“HypoVereinsbank is entering into a strategic co-operation with ITS, which is an experienced and highly proficient partner,” says Matthias Sohler, Chief Operating Officer at HVB. “This will enable us to create a securities processing platform fit for both parties over the long term, and to derive operating cost benefits for HypoVereinsbank,”
In terms of transaction volumes ITS is now the second largest transactions bank in Germany behind DWP but ahead of European Transactions Bank the former Deutsche Bank operation now controlled by London based Xchanging. ITS processed an estimated 31 million transactions a year in 2005. With the addition of about 4 million transaction a year from Fonds Service Bank (which will finish migration to ITS in the first half of 2006) and with the addition of 4 million transactions a year from HVB retail and private banking business ITS will head for 40 million transactions a year.
Existing clients of ITS include not only DAB but also S-Broker, the retail broking arm of the German savings banks, French warrants and derivatives brokerage specialist Fimatex, and Funds Service Bank, a service provider specializing in retail brokerage accounts.
“Acquiring HypoVereinsbank as a client is a decisive step for ITS, allowing us to take an active role in shaping the consolidation of the German securities processing market and building up the best securities processing bank in Germany,” says Dr. Christiane Marliani, Managing Director of ITS. “We are confident that our state-of-the-art technology coupled with our service quality, flexibility and cost efficiency will help ITS to win further demanding clients in the future.”
ITS is currently 51% owned by HSBC Trinkaus & Burkhardt and 49% by T-Systems International a subsidiary of Deutsche Telekom. T-Systems is expected to acquire the majority stake in the near future. Of 190 staff, 160 came originally from Trinkaus. “T Systems adds credibility for white label propositions in terms of human resources and IT,” says an HSBC Trinkaus & Burkhardt spokesman. And the measure of independence necessary to persuade German financial services firms to entrust their business to a rival private bank.
HSBC Securities Services in London will also be pleased by the deal, since the burgeoning operation sees HSBC Trinkaus & Burkhardt as central to its expansion plans in Continental Europe. “This transaction reflects both the strength of ITS and also the clear focus of the group on the development and expansion of HSBC Securities Services Deutschland, which provides a full range of securities custody and administration services in the German market,” notes HSBC in a statement.