BankBoston Forms Strategic Alliance With Investors Bank & Trust Company.BOSTON--(BUSINESS WIRE)--July 20, 1998-- Sells Domestic Institutional Custody Business, Enters Custody Outsourcing Agreement For Asset Management Business, And Strengthens Sub-Custodial Relationship In Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. BankBoston (NYSE NYSE See: New York Stock Exchange :BKB BKB Basler Kantonalbank (Switzerland) BKB Black King Bar (gaming weapon) BKB BV Kwaliteitsverklaringen Bouw (Dutch) BKB BankBoston Corporation ) announced today that it has formed a strategic alliance and is expanding its relationship with Boston-based Investors Bank & Trust Company (IBT (1) (Instructor Based Training) Training courses conducted by human teachers. (2) (Internet Based Training) Training courses provided via the Internet. ), a wholly-owned subsidiary of Investors Financial Services Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :IFIN IFIN Integrated Farming Information Network ). As part of this alliance, BankBoston has agreed to sell its domestic institutional custody business to IBT for $50 million -- $44 million to be paid at closing and an additional $6 million to be paid 12 months later based on business performance. In addition, BankBoston has entered into an outsourcing agreement that calls for IBT to conduct the settlement and depository functions of BankBoston's $25 billion asset management business. BankBoston will retain the investment management and administrative responsibilitiesfor its asset management customers. In Latin America, IBT will continue to utilize BankBoston's strong Brazilian custody operations to expand its business in that country and will seek to expand this relationship throughout the region. The transaction is expected to be completed by the end of the third quarter of 1998. "The formation of this strategic alliance is a win-win for IBT, BankBoston, and for our customers," said BankBoston Vice Chairman Brad Warner. "Investors Bank & Trust is a highly regarded securities processor, and this alliance will enable us to provide our customers with the highest quality custodial services while allowing us to focus on our domestic asset management business. Similarly, we look forward to continuing to provide IBT the utmost in sub-custodial services in Brazil, while expanding this relationship throughout Latin America in the future." "This transaction represents an expansion of a successful, long-term business relationship between Investors Bank & Trust and BankBoston," said Kevin J. Sheehan, President, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and Chairman of Investors Bank & Trust Company. "As a client of BankBoston's commercial banking and Brazilian custody operations, we are extremely pleased at this opportunity to continue growing our business while servicing BankBoston's custody needs." BankBoston's domestic institutional custody business, with about $45 billion in assets under administration, provides a full range of trust and custody services to some 600 institutional customers, including endowments, foundations and defined benefit plans Defined benefit plan A pension plan obliging the sponsor to make specified dollar payments to qualifying employees at retirement. The pension obligations are effectively the debt obligation of the plan sponsor. Related: Defined contribution plan . The 106 BankBoston employees primarily located at the central custody operation in Canton, Massachusetts, will be offered the opportunity to remain with the business as employees of IBT. BankBoston's Latin American custody services business will not be affected by this transaction. BankBoston is a leading provider of securities services in Latin America, as well as one of the region's largest and most experienced foreign banks. BankBoston intends to continue to invest and grow its Latin American custody services business. This transaction reflects BankBoston's continued commitment to sharpen its focus on the Corporation's key strategic businesses and on its disciplined capital management, encouraging the redeployment re·de·ploy tr.v. re·de·ployed, re·de·ploy·ing, re·de·ploys 1. To move (military forces) from one combat zone to another. 2. of capital to higher-return businesses with attractive growth opportunities. Over the past two years, BankBoston has exited a number of businesses -- and joint-ventured others -- where the company lacked sufficient scale to recognize superior returns (e.g. the withdrawal from its national consumer businesses), or where there was greater opportunity in partnering with an industry leader (e.g. the creation of HomeSide Inc., an innovative mortgage banking joint venture, whose subsequent sale resulted in a pre-tax gain of $165 million for BankBoston). Investors Financial Services Corp. provides asset administration services for financial assets Financial assets Claims on real assets. totaling approximately $164 billion primarily through its wholly-owned subsidiary, Investors Bank & Trust Company. The Company provides global custody, multicurrency accounting, institutional transfer agency, performance measurement, foreign exchange, securities lending Securities Lending When a brokerage lends securities owned by its clients to short sellers. Notes: This allows brokers to create additional revenue (commissions) on the short sale transaction. , mutual fund administration and investment advisory services advisory services advisory services provided to the public, in their capacity as owners and managers of animals, are an important part of veterinary science. They may be provided by government bureaux, by commercial companies who deal in pharmaceuticals or animals or animal to financial asset managers, including mutual fund complexes, investment advisors, banks and insurance companies. BankBoston (NYSE:BKB), with assets of $70.5 billion and some 23,000 employees, is the nation's oldest commercial bank. BankBoston is engaged in consumer, small business and corporate banking in New England; delivering sophisticated financial solutions to corporations and governments nationally and internationally; and full-service banking in leading Latin American markets. The Corporation's common stock is listed on the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and Boston stock exchanges.
CONTACT: BankBoston
Kristen Habermann, 617/434-6883
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