Citi Bucks Rush out of Corporate Trust Business
Moyer, Liz, American Banker
While other banks are getting out of the corporate trust business, Citicorp said it has made a commitment to keep its operation.
Robert A. McCormack, Citicorp's executive vice president for global relationship banking, sent a memorandum to employees last month telling them the company is rededicating itself to expanding its corporate trust business.
The memo came after months of speculation that Citicorp was considering a sale of the unit. That speculation was fueled when Citicorp began a review of it.
"We did review the corporate agency and trust business and decided that it was a very important piece to our overall securities processing business and that it was something we would like to continue to invest in," said Amy Dates, a Citicorp spokeswoman.
Ms. Dates would not confirm reports that Bankers Trust New York Corp. had been a potential buyer. State Street Corp., which bought a municipal debt administration business from Citicorp in 1993, was also believed to be a potential buyer.
Bankers Trust refused to comment on the matter, and State Street officials could not be reached.
Corporate trust, the back-office processing of securities and investments, is offered as a service to companies in the hope that they will do other business with the bank, analysts said.
But corporate trust requires massive data processing capabilities. It has narrow margins and relies on scale to be profitable.
Many of the nation's largest banking companies have chosen in the last year to leave the business. Barnett Banks Inc. …