CACEIS has announced that it will buy the Royal Bank of Canada’s (RBC’s) European asset servicing business and its related Malaysian service centre.
The two banks have signed a Memorandum of Understanding through which CACEIS will purchase RBC’s European securities services book of business which includes custody and global custody FX, securities lending, fund administration and transfer agency, along with middle-office services.
The deal, which is subject to standard regulatory and antitrust approvals, is expected to be finalised by the end of Q3 2023. This will also require prior consultation within the appropriate works councils at CACEIS.
By agreement with RBC, CACEIS indicated that it does not wish to disclose the transaction price. However, a CACEIS spokesperson told Asset Servicing Times that CACEIS would be able to absorb the transaction without capital increase.
The MoU relates to CACEIS’ acquisition of a European asset servicing business from Toronto-based RBC that includes approximately €1.2 trillion in assets under administration through its fund services business and approximately €0.5 trillion in assets under custody.
With this acquisition, CACEIS will expand its AUC to approximately €4.8 trillion and AuA to approximately €3.5 trillion.
This builds on the French bank’s purchase of KAS Bank’s securities services business, which was announced in July 2019 and completed in May 2021.
In December 2019, CACEIS completed the acquisition of Santander Securities Services (S3) in Spain and 49.99 per cent of S3’s operations in Latin America, specifically in Brazil, Colombia and Mexico.
Commenting on the MoU that CACEIS has announced with RBC, CACEIS’ chief executive Jean-Francois Abadie says: “This combination with RBC Investor Services helps us to consolidate our position as a leading European player in asset servicing. We are enhancing our leadership across a range of services, increasing our position in a number of key markets, growing relationships with global asset managers, and increasing our capabilities and scale.
“Additionally, the staff from RBC Investor Services will bring their expert knowledge of the servicing needs of international investor clients and distribution services.”
Francis Jackson, CEO of RBC Investor Services, comments: “We are proud of the business that we have built in Europe, and are excited for CACEIS to continue to deepen relationships with our clients. This is an opportunity for our European clients to enjoy the combined scale of RBC Investor Services' European business and Malaysia centre of excellence and CACEIS' global footprint, while allowing us to focus on our Canadian asset services franchise in our home market.
Jackson continues: “CACEIS has a track record of growth. This is an important milestone as they strengthen their position as a leading European asset servicer. We are confident this proposed transaction will bring benefits to our clients and our employees.”
.jpg)