Mitsubishi UFJ Trust and Banking Corporation (MUTB) has inked a deal with Bank of Montreal (BMO) to take on its entire book of clients under its agency securities lending programme in a move designed to significantly enhance its North American footprint.
The Canadian bank is understood to be exiting businesses its senior management consider to be non-core.
Earlier this month, BMO Financial Group concluded a deal to hand over its asset management business covering clients in Europe, the Middle East and Africa to Ameriprise Financial.
The latest deal is thought to be mutually beneficial for both parties as BMO has been seeking to exit the agency lending business for the past year, while MUTB, which has been building out its third-party lending service since 2019 and is seeking to grow outside of its established Asian foundation, will welcome BMO’s large, North American client base.
SFT understands that the agreement, which was concluded in February, will see MUTB, the trust banking arm of the Mitsubishi UFJ Financial Group, assume responsibility for trading on behalf of BMO’s clients this month, with some operational services transitioning over later this year.
Most of BMO’s securities lending team are not expected to be taken on by MUTB, with Christopher Kunkle, who served as head of agency lending since 2015, and Daniel Hoover, BMO’s head of distribution/sales since 2014, having already parted ways with the bank.
Kunkle declined to comment on the deal other than to confirm he has left BMO and to say he is open to new opportunities in the coming months.
Meanwhile, MUTB has been on a hiring spree since Tim Smollen took the reins of the global agency lending solutions business in January 2020.
Most recently, the Japanese banking group’s global securities lending solutions group (GSLS) gained Thomas Ryan from Deutsche Bank, as head of asset and liability management for the Americas and head of trading for the bolstered client base under the leadership of Anthony Toscano, who oversees the North American business.
The acquisition of BMO’s clients is a major step forward in MUFG’s vision of becoming the first Asian bank to assume a leading position within the global securities financing marketplace.
The journey began with the appointment of Smollen and his team from Deutsche Bank.
Beyond the personnel, MUFG Investor Services, the global asset servicing arm of Mitsubishi UFJ Financial Group, selected EquiLend Spire’s securities finance system as its core global platform to expand its front, middle and back-office securities lending systems.
EquiLend Spire is the product of a partnership between EquiLend and Stonewain Systems and offers a modular and scalable securities finance solution for compliance, reporting, risk analysis, accounting, positions and trading.
BMO and MUFG declined to comment on the deal.
