LOS ANGELES -- Bankers Trust Company of California, a subsidiary of Bankers Trust New York Corp., said yesterday it has agreed to sell its San Francisco unit, which provides corporate trust, corporate agency, and program administration services primarily to California municipal issuers.
Bankers Trust said it has signed a purchase agreement with First Trust, a St. Paul, Minn.-based subsidiary of First Bank System Inc.
"This action reflects a strategic decision by Bankers Trust to redeploy capital and resources," B.J. Kingdon, seniior vice president and head of corporate trust, said in a statement for the firm. "Bankers Trust Company of California will continue to provide corporate trust services for structured finance transactions and escrow services in connection with environmental cleanup, as well as trust services for thrift, pension, and personal trust."
About 20% of Bankers Trust's corporate trust and agency staff will be affected by the change, the firm said. The transaction is subject to regulatory approval and includes about 1,300 trust and agency appointments, or about 10% of Bankers Trust's global and agency appointments.
Bankers Trust Co., the principal subsidiary of Bankers Trust New York Corp., will continue to provide -- out of its New York office -- trust and agency services to corporate and municipal clients nationally and internationally.
First Trust coordinates all trust activities for First Bank. The acquisition of the Bankers Trust unit "allows us to leverage our existing systems, operations, and expertise to capitalize on the corporate trust opportunities in the California market in the most economic way possible," John F. Grundhofer, chairman, president, and chief executive officer of First Bank, said in a statement yesterday.
Mr. Grundhofer added that California provides a lucrative market to a well-established corporate trust provider because of the large volume of municipal bond issuance.
First Bank System plans to establish a new trust subsidiary in San Francisco, with staffing levels to be determined later. First Trust's various trust services generate more than $115 million of revenue annually. Revenues at the Bankers Trust San Francisco unit total about $13.5 million annually, First Bank said.