Dive Brief:
- U.S. Bank agreed to buy MUFG Union Bank's debt servicing and securities custody portfolio, which has about $320 billion in assets under management, the Minneapolis-based bank announced Wednesday.
- Financial terms of the deal — which was signed Dec. 23 and, pending regulator approval, is expected to close by the end of March — were not disclosed.
- "This transaction is a great fit for U.S. Bank," said Gunjan Kedia, vice chair of the bank's wealth management and investment services unit. "We are thrilled to have the opportunity to increase our presence on the West Coast and solidify our position as a leading provider of corporate trust, institutional trust and fund custody services."
Dive Insight:
Beyond bolstering the West Coast reach of a Midwest stalwart, the deal gives U.S. Bank 600 new clients. The bank's investment services division already has more than $7.7 trillion in assets under custody and administration worldwide.
For MUFG Union Bank, the agreement represents the latest reshuffling of priorities by a U.S. arm of a foreign financial juggernaut. MUFG Union Bank is a subsidiary of Japan's largest lender.
The move comes less than two months after Spanish lender BBVA agreed to sell its U.S. retail arm to PNC for $11.6 billion. Later that month, the Financial Times first reported that British titan HSBC is considering leaving the U.S. retail banking market — although, the publication's sources said, a full exit from the U.S. is off the table because the market is too important to the lender's investment banking and wealth management business.
"After a thorough analysis of our market position in the Debt Servicing and Securities Custody product areas, we made the decision to sell these products and services within our Transaction Banking portfolio, which will enable us to reinvest capital in other strategic areas of focus to the benefit of our clients and MUFG Union Bank," said Ranjana Clark, MUFG Union Bank's head of global and Americas transaction banking.
