Consolidation of the overcrowded Australian sub-custody market took another step forward yesterday with the news that HSBC is to acquire the sub-custody and clearing businesses of Westpac in Australia and New Zealand.
The British bank is paying up to A$150 million (approximately US$112.5 million) subject to the business meeting certain performance standards over a six month transition period.
“The acquisition will make HSBC the leading sub-custody and clearing player in Australia and New Zealand and demonstrates our commitment to these markets,” says Nick Bryan, Head of HSBC Securities Services in Asia-Pacific. “The addition of Westpac’s business to our existing presence in the Australasian markets will significantly enhance our regional proposition to our clients. The addition of the Westpac business and its team complements the existing in-depth local expertise and knowledge provided by our existing Custody and Clearing teams in Australia and New Zealand. Westpac clients will benefit from consistent service, global systems infrastructure and the global best practices that HSBC currently provides throughout the 37 markets in its award winning sub-custody and clearing network. Many of Westpac’s clients already use us in our network and we aim to work closely with them and Westpac over the coming months to ensure a seamless transition to HSBC and to ensure the two businesses are integrated as quickly and efficiently as possible.”
The acquisition is expected to be completed by 31 August 2006. Completion of the transaction is subject to obtaining the usual necessary regulatory approval.