Bankers Trust New York Corp. said Wednesday that it will form a global- custody joint venture with Credit Lyonnais covering $85 billion of the French bank's assets under management.
The U.S. bank is nearing a similar strategic alliance with a South African bank, said Richard Feehan, the London-based managing director of Bankers Trust's European custody business.
In a similar vein, Bankers Trust last month set up an investment banking joint venture with Banco Itau, the second-largest private bank in Brazil.
Mr. Feehan said all of these arrangements "give Bankers Trust market access and other banks access to systems and technology."
Analysts said the international alliances underscore a scramble among a few highly competitive U.S. financial institutions to expand their global securities custody and processing.
"This business is still consolidating, and global consolidation is the next step," said Lawrence Cohn, a bank analyst with PaineWebber Inc.
Credit Lyonnais, one of the world's 20 largest banks, has been forced to refocus its strategy in the wake of more than $2.6 billion of losses last year.
The $107 billion-asset Bankers Trust, though still profitable in 1994, saw its net income drop 43%.
It then lost $157 million in the first quarter of 1995.
On Monday, Credit Lyonnais said it would sell its Brazilian subsidiary, Banco Frances y Brasiliero, to Banco Itau for $335 million.
Other units of $330 billion-asset Credit Lyonnais are up for sale as well, including subsidiaries in Peru, Argentina, and Holland
Bankers Trust chairman Charles Sanford has repeatedly stressed that his bank aims to pursue a "global-local" strategy, meaning that all business operations, no matter how far-flung, will be managed locally.
"Our philosophy is that all business is local," said Alan Hanson, a Bankers Trust spokesman.
Analysts said Bankers Trust won the allegiance of Credit Lyonnais by beating out Chase Manhattan Corp., State Street Boston Corp., and Morgan Stanley Group Inc.
These U.S. banks as well as Citicorp and Bank of New York are investing heavily in global custody operations.
According to a survey published this month by Global Finance magazine, Bank of New York is now the largest player, with nearly $3 trillion of assets under custody. State Street ranks second at $1.9 trillion, followed by Chase at $1.8 trillion and Bankers Trust at $1.4 trillion.
In May, Bank of New York purchased J.P. Morgan & Co.'s $800 billion- asset global custody business, a month after acquiring $462 billion in assets under custody from Bank of America. In Britain, National Westminster Bank PLC recently sold its $90 billion-asset global custody operation to Lloyds Bank.
"There's a worldwide rationalization taking place in global custody through agreements and acquisitions - and there's more to come," Mr. Feehan said.
The Bankers Trust-Credit Lyonnais agreement was reportedly more than two years in the making. It brings to $1.4 trillion the amount of assets under Bankers Trust's custody, of which $220 billion is for customers outside the United States.
Until now, Bankers Trust had only a limited custody business in France. Wednesday's agreement, due to take effect in November, will permit Credit Lyonnais to offer a broader range of services, such as performance measurement, that will permit clients to gauge the actual and relative performance of their investment managers.
Credit Lyonnais will handle marketing for the two banks in France, Switzerland, Belgium, and Luxembourg. The two companies have yet to come to final terms on how they will share revenues.
The two banks said in a statement that they will set up a client support service unit to provide customers with direct access to information on their accounts.
Olivier Perrain, a spokesman for Credit Lyonnais in Paris, said the deal will help Credit Lyonnais save time and large amounts of money it would otherwise have had to invest as customers seek increasingly complex services.
"We were confronted with a choice between making expensive investments on our own and losing time, or picking another partner," Mr. Perrain said.
