Deutsche Bank has sold a majority 51% stake in its back office outsourcing subsidiary, the european transaction bank (ETB), to London-based Xchanging.
Under the agreement, the operational management of the securities, funds and derivatives processing specialist will be transferred to Xchanging in return for a EUR40 million investment in the venture.
ETB currently processes up to 2.1 million transactions a day at peak times and claims a market share of around 12% of German securities transactions settled at Deutsche Bourse. Clients include Deutsche Bank, private bank Sal. Oppenheim and Sparda-Banken-Gruppe.
Hermann-Josef Lamberti, member of the board of managing directors and COO of Deutsche Bank says the transaction enables the bank to focus on it core businesses while also gaining the benefit of increases in operational efficiency.
He adds: "At the same time the partnership offers Deutsche Bank the opportunity to participate in the favourable economics arising from the consolidation in the transaction processing market."
The move marks an advance into the relatively underexplored territory of securities processing for Xchanging. Established in 1998 by Andersen Consulting partner David Andrews, the firm has since scooped a number of major back office processing and procurement deals, including big-ticket contracts with BAE and Lloyds of London.
Describing ETB as a "natural fit" for Xchange's operations business, CEO Andrews adds "we intend to be an important player in the securities processing market".