Remaining stake in custody and fund administration provider to be bought for C$1.1 billion in cash.
Royal Bank of Canada (RBC) has reached an agreement to acquire the remaining 50 percent stake from Banque Internationale a Luxembourg S.a. (BIL) of its joint venture in RBC Dexia Investor Services, a provider of global custody, pension administration, shareholder and treasury services to institutional investors. The deal, which still requires closing and regulatory approvals, will see BIL receive C$1.1 billion in cash.
"The transaction has significant strategic value to us, not only as a standalone business but also in its complementary capabilities to RBC. It is a strong business that generates stable revenue in an attractive sector that is well positioned for long-term growth. [Dexia] has a premier list of institutional investor clients globally and fits well with our diversification strategy," says Gordon Nixon, president and CEO of RBC.
RBC also says it sees potential growth for custody services as the markets grow stronger over coming years. "This is a very scalable business with leading infrastructure and processes already in place. It is well positioned to benefit from higher interest rates and an improvement in market asset values," says Jim Westlake, Group Head, International Banking and Insurance, RBC.
Anthony and James look at developments pertaining to the Consolidated Audit Trail and wonder if big-tech companies could challenge traditional asset managers.Subscribe to Weekly Wrap emails
- WatersTechnology Innovation Summit Q&A: Elly Hardwick, Deutsche Bank
- In Capital Markets, Blockchain's Evolution Has Left the Bitcoin Model Behind
- Waters Wavelength Podcast Episode 96: CAT Concerns & Big Tech Takes Aim at Asset Managers
- WatersTechnology Innovation Summit Q&A: Stewart Carmichael, Schroders
- Waters Wavelength Podcast Episode 95: Bitcoin/Blockchain News, BNP's Acquisition, Post-Trade Tech