MADRID (Reuters) -Credit Agricole agreed to buy Santander’s 30.5% stake in custody and asset servicing entity Caceis, the banks said, in a deal that will give the French lender full control of the business.
The banks, which issued separate statements on the agreement late on Thursday, did not disclose the value of the deal, which remains subject to regulatory approvals and is expected to complete in 2025.
In April 2019, the lenders agreed to combine their custody and asset servicing operations as part of a joint venture aimed at achieving scale without a full merger.
Spain’s Santander said the sale would not have a relevant impact on its earnings or earnings per share, but said the transaction would boost its capital ratio by around 10 basis points.
At the end of September, Santander reported a fully-loaded core tier-1 capital ratio, the strictest measure of solvency, of 12.5%.
Credit Agricole said the deal was consistent with its targets for return on investment and return on tangible equity and would have a negative impact of about 30 basis points on its fully-loaded core tier-1 capital ratio.
Santander and Caceis’ joint venture in the depositary, custody and related asset servicing business in Latin America is outside the scope of the transaction and will remain jointly controlled by Santander and France-based Caceis, the lenders said.
Credit Agricole recently expanded its asset servicing business with the acquisition of Royal Bank of Canada’s Investor Services’ operations in 2023. Asset servicing and custody provides stable, fee-based revenue that is less sensitive to interest rate fluctuations. Such businesses require lower capital compared to lending, as custodians hold assets on behalf of clients without assuming ownership risk.
These activities also tend to benefit from scale effects, as larger volumes improve margins by allowing the business to spread fixed costs like technology and compliance.
(Reporting by Jesús Aguado and Mathieu Rosemain; Editing by Jamie Freed and Susan Fenton)
