The Bank of N.T. Butterfield & Son Ltd. announced Thursday that it has entered an agreement to acquire Deutsche Bank’s banking and custody business in the Cayman Islands, Jersey and Guernsey.
The terms of the agreement were not disclosed, but the announcement stated Deutsche Bank clients will have the opportunity to transfer their banking relationships to Butterfield. The announcement also stated Butterfield intends to offer positions to the “majority” of the Deutsche Bank employees available to transfer along with the acquired business, which provides services primarily to financial intermediaries and corporate clients.
“We look forward to welcoming Deutsche Bank’s clients to Butterfield, along with the employees who are familiar with their accounts, and we are committed to ensuring that their transition to Butterfield is straightforward and seamless,” stated Butterfield CEO Michael Collins.
According to Butterfield, the acquisition could increase its deposit base by about 20 percent.
“It will help us establish a foothold in Jersey, an attractive banking market, as well as increasing our scale and market share in Cayman and Guernsey,” Mr. Collins said. “The customer base has a very similar profile to our existing banking business and we look forward to welcoming the new relationship teams and their clients to the Butterfield Group.”
The transaction is expected to close by the end of the year, according to Butterfield filings with the U.S. Securities and Exchange Commission.
Butterfield’s planned acquisition comes about four months after the bank announced that it would be acquiring Deutsche Bank’s Global Trust Solutions business, which comprises some 1,000 trust structures for roughly 900 clients. That acquisition did not include the Global Trust Solutions U.S. operations, and the terms of the agreement also were not disclosed.
Butterfield stated on Wednesday that more than 90 percent of the Deutsche Bank staff that were involved in that transaction have accepted employment agreements with Butterfield, and that the acquisition is expected to be completed by the end of the second quarter.
“The acquisition of Deutsche Bank’s Global Trust Solutions business announced in October will provide Butterfield with a Singapore trust company. We have long had an interest in establishing operations in Singapore to support the growth of our legacy Trust business in Asia,” Mr. Collins said. “And with this banking transaction, we will gain a presence in Jersey to complement our existing Guernsey-based Channel Islands bank, giving us increased scale and the opportunity to realize operational economies in the region.”
Butterfield also announced its financial results for 2017, reporting net income of US$153.3 million for the year – up from US$115.9 million in 2016.
“I am pleased to report that Butterfield achieved record profits in 2017,” Mr. Collins stated in the earnings announcement. “These strong results were driven by our specialized banking and wealth management businesses that generate consistent fee income, and an expanding net interest margin that benefited from our efficient deposit franchise and a rising rate environment.”