U.S. Bancorp buying large custody book from MUFG Union Bank

U.S. Bancorp in Minneapolis has agreed to buy a debt servicing and securities custody portfolio with about $320 billion of assets under management from MUFG Union Bank.

U.S. Bancorp already provides custodial and administrative services for $7.7 trillion of assets for clients around the world. The deal would bring it 600 new clients. The financial terms of the deal, which was reached on Dec. 23 and announced Wednesday, were not released.

Gunjuan Kedia, vice chair of U.S. Bancorp’s wealth management and investment services division, said in a statement that the acquisition will raise the company’s profile on the West Coast, where MUFG operates as part of the Japanese finance company.

“This transaction is a great fit,” Kedia said.

Ranjana Clark, head of transaction banking and Bay Area president at MUFG Union Bank, said the company plans to reinvest proceeds from the sale “in other strategic areas.”

The bulk of the custodial banking market is concentrated in a handful of firms but has attracted the attention of regulators recently after Citigroup mistakenly overpaid $900 million to debtors of Revlon on behalf of the struggling retail company.

The deal between U.S. Bank and MUFG Union Bank is expected to close in the first quarter upon regulatory approval.

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