State Street is in talks with Indias second largest bank ICICI for a partnership in the securities custody business, according to a report in local newspaper the Business Standard. The report said the custodian is likely to pick an equity stake in the proposed joint venture, citing officials close to the development.
While State Street is keen on picking a majority stake in the venture, it may settle for a significant minority stake, the newspaper quoted one of the officials as saying.
State Street is eager to expand its global reach though partnerships and acquisitions. During recent conference calls with press and investors, CEO Jay Hooley said the custodian bank would look at acquisitions selectively, with Europe being the main area of focus. It is also understood that the $218 trillion custodian has been trying to gain a foothold in the Indian market for nearly a year.
While State Street already has a global custody agreement with a foreign banks Indian arm, it is said to be keen to have its own presence in India, said the Business Standard report. They had earlier held discussions with a couple of players like Quant and HDFC Bank, but these talks fell through because of differences, including those on valuation, the report quoted the official as saying.
ICICI Bank is also understood to be eager to gain a foothold in the international custody business. The bank had total assets of Rs. 47 (US$ 1,271 million) for the year ended March 31, 2012 and profit after tax of Rs. 36.47 billion ($93 billion) at March 31, 2012.
When asked to confirm the report a State Street spokesperson said: We would never comment on rumor or speculation.
(JDC)