White-labelling of custody services – where a custodian fronts its clients with services that are produced in another global custodian’s network – could be a spreading model as system cost thresholds rise. The recent deal in Luxembourg, where Mitsubishi UFJ is moving client assets worth 630 billion dollars over to Citi’s vault, supports the impression.
Some time ago, we wrote in detail about how Sweden-based custodian SEB – after pain – could announce success in its move to make Brown Brothers Harriman its backbone service provider, while staying in the business relations with its clients.
Now, the Luxembourg-based custody part of Mitsubishi UFJ Investor Services & Banking, MIBL, goes down a parallel path in company with Citi – explicitly referred to as a white label solution.
“The deal will result in the transfer of approximately $630 billion of assets onto Citi’s platform. As part of the deal, MIBL will white label Citi’s custody platform to provide instruction capabilities for securities, cash, and foreign exchange transactions, as well as the associated asset servicing to its clients,” Citi writes in its press release.
Takes a year and a half
The setup to put MIBL’s brand on the Citi-produced capabilities is planned to be in place by early 2022.
Citi Securities Services says it holds over 21,500 billion dollars in assets under custody and administration, and runs its operations through 64 proprietary branches across the world.
MIBL is part of MUFG Investor Services, the global asset servicing part of Japanese financial giant Mitsubishi UFJ Financial Group (MUFG).
(Photo: Helena Hertz / Unsplash)