Stanchart snaps up Barclays' custody business

Brian Benza
Staff Writer | Thursday April 29, 2010 00:00

In a statement, the two British banks say the transfer of the business, which is part of the deal that involves the purchase of all of Barclay's African custody businesses by Stanchart, should be completed some time this year, subject to regulatory approval.

The custody business is a financial service, usually available to institutional investors only, that includes the management and safekeeping of securities and bonds, the collection of dividends, dealing with tax, valuation of investments, foreign exchange, and the settlement of transactions.

Barclays exited the global custody business outside Africa in 1998 and, according to Barclays Botswana Managing Director Thuli Johnson, the sale of the Botswana business will realise value and give them an opportunity to focus on increasing their presence in key magnet segments.

'Our custody business in Africa is attractive and profitable and the sale will realise significant value for Barclays Africa,' says Vinit Chandra, CEO of Barclays Africa.

'We will work closely with Standard Chartered to ensure the transition does not impact our clients and employees and remain fully committed to growing our banking operations in Africa.'

Meanwhile, Standard Chartered head of transaction banking Karen Fawcett says the acquisition will ensure that they develop their custody capabilities rapidly and seamlessly across Africa.

According to Standard Chartered, as at December 2009, the gross value of the asset that is the subject of the transaction was approximately US$3 million and customer assets under custody were approximately US$6.2 billion. 'The African business forms a key part of Standard Chartered's build out of international custodian services, alongside existing capability in Asia and the Middle East,' Stanchart says in a statement.

'The acquisition adds direct custody capabilities in eight African markets and indirect capabilities in a further eight markets provided through a network of third party sub-custodians via an operation in Mauritius.'  'We are already seeing ongoing demand for regional and international investment services across this region,' adds Fawcett. 'Standard Chartered remains committed to providing clients with an integrated set of solutions that promote ongoing growth of this industry.

'With this acquisition, we will enhance our custody offering and continue to gain a strong foothold as a core bank to our clients in Africa.'