Credit Agricole Takes the Wheel: Santander Steps Aside in Caceis Deal
In a move signaling Credit Agricole’s ambition to solidify its footing in the custody and asset servicing arena, the French banking giant has reached an agreement to acquire Santander’s 30.5% stake in Caceis. This transaction grants Credit Agricole full control of the business, a strategic shift expected to enhance its operational autonomy. The deal, which still awaits regulatory approval, is projected to close in 2025. This marks a significant pivot since the two banks joined forces in 2019 to scale their custody operations through a joint venture while maintaining independence from a full merger.
For Santander, the divestiture is part of a larger strategy to bolster its capital position. While the Spanish lender anticipates no material impact on its earnings, it does expect a modest boost of 10 basis points to its capital ratio, which stood at 12.5% at the end of September. Meanwhile, Credit Agricole is betting on long-term gains, despite a 30-basis-point dent in its own capital ratio. The French bank remains confident in the deal’s alignment with its financial objectives, emphasizing its consistency with return on investment and tangible equity targets.
Interestingly, not all aspects of the original partnership are being dissolved. Santander and Caceis will continue their joint venture in depositary and custody services across Latin America, preserving a foothold in the region’s growing markets. Credit Agricole, however, has been expanding its reach independently, including its acquisition of Royal Bank of Canada’s Investor Services in 2023. The growth trajectory underscores the increasing appeal of asset servicing, a business celebrated for its stable revenue streams and scalability in a capital-light framework.
As interest rates and global financial dynamics remain volatile, Credit Agricole’s move reflects a broader trend among banks seeking stability in fee-based services. Custody businesses thrive on economies of scale, with technology and compliance costs spread across larger asset volumes. For Santander, this sale represents a calculated step toward capital optimization, while for Credit Agricole, it’s a leap into greater autonomy in a lucrative and growing market.
(Source: Bloomberg | WSJ)
