Citibank and Bank of Montreal (BoM) formed a new company that, pending regulatory approval, will provide global custody services in Canada. The new venture means that BoM, which already has a close relationship with Citibank, will chip in its customers, while Citi does the processing. The banks will split the proceeds equally.
There's upside for both companies. "For Citi, it gives us a reasonable position in the sixth-largest economy in the world," says Citibank managing director Neeraj Sahai. For BoM, it allows the bank to retain a part of its hold on its customer base, to be in a core business that's important to the bank and saves the bank a lot of money, he says.