Butterfield to acquire Deutsche’s Global Trust Solutions biz

The Bermuda-based Bank of NT Butterfield & Son today announced that it is to acquire Deutsche Bank’s Global Trust Solutions business, excluding its US operations, as it looks to expand the geographic footprint of its trusts business.

The price and other terms of the agreement weren’t disclosed.

Upon completion of the transaction, which is subject to regulatory approvals, Butterfield will take over the ongoing management and administration of the GTS portfolio, comprising approximately 1,000 trust structures for some 900 private clients, Butterfield said in a statement.

Butterfield is also “offering positions to all employees who are fully dedicated to GTS in the Cayman Islands, Guernsey, Switzerland, Singapore and Mauritius”, the bank said, adding that this would help to “ensure continuity of service for clients”.

It said it also plans to “partner” with Deutsche Bank to provide trust products to Deutsche Bank’s clients on an ongoing basis.

The deal is expected to close in the first half of 2018, subject to customary closing conditions, Butterfield said.

Butterfield chairman and chief executive Michael Collins said the trust sector “is core” for the bank, and for this reason, the acquisition of the Deutsche Bank Global Trust Solutions business would enable it “to add scale and professional bench strength to our trust operations in Switzerland, Guernsey and Cayman”.

The Deutsche Bank operation would also give Butterfield “a physical presence in Asia, which we view as a growth market”, he added.

Fabrizio Campelli, Deutsche Bank’s global head of wealth management, said the sale of the operation was part of Deutsche Bank’s strategy of simplifying its business “and positioning its wealth management operations for growth in our core markets”.

Butterfield, he added, was “a well-known leader in the trust industry, and we look forward to working with them to provide our clients with a broader product offering”.

As reported,  Butterfield Bank, one of the oldest names in offshore banking circles, listed its shares on the New York Stock Exchange last year. At the time, its chief executive spoke of using some of the funds raised in the IPO to acquire trust businesses that would complement its existing offerings in this area.

Butterfield announced its plans to acquire the Global Trust Solutions operation this morning, alongside its third quarter results, which showed its core net income was US$40.7m, or 73 cents per diluted common share, compared to  US$33.4 million, or 60 cents per diluted common share, in the same period last year.

This afternoon the shares were trading at US$36.60, up 79 cents, and US$11.50 – or 48% – more than they closed at on their first day of trading last September.

‘Oldest bank traded on NYSE’

At the time of its IPO last year, Collins was quoted as telling the Royal Gazette newspaper that Butterfield was “the oldest bank trading on the New York Stock Exchange”.

The bank grew out of a Bermuda trading company founded by Nathaniel Butterfield in 1758; Butterfield’s son, Nathaniel T, expanded the business to include financial services.

In 1858 the Bank of NT Butterfield & Son was founded as Bermuda’s first deposit-taking institution; over the next few decades it helped to support the archipelago’s growing tourism industry and infrastructure, then evolved to accommodate the wartime economy of the early 1940s, and a need to look after military personnel stationed nearby.

By 1951 it had become the largest Bermudian-owned and held company in terms of per capita owners.

As of 30 September, Butterfield Trust had assets under administration of around US$95.2bn.

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