U.S. Bank National Association - the lead bank of U.S.
Bancorp ( USB ) - entered into a
definitive agreement to obtain Deutsche Bank AG 's
( DB ) municipal bond
trustee unit. The deal is anticipated to be completed in the third
quarter of this year.DEUTSCHE BK AG (DB): Free Stock Analysis ReportMITSUBISHI-UFJ (MTU): Free Stock Analysis
ReportUMB FINL CORP (UMBF): Free Stock Analysis
ReportUS BANCORP (USB): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment
The agreement will expand the reach of U.S. Bank's global
corporate trust business, which has presence in CA, MS, NY, TN and
The transaction will add roughly $57 billion in assets to U.S
Bank's existing $3 trillion of assets under administration, managed
by the bank's corporate trust division. The deal with Deutsche Bank
will add an additional 1,100 contracts to the roughly 125,000 trust
and agency contracts currently held by the bank.
Management at U.S. Bank believes that the acquisition is a step
forward in augmenting its leadership position in municipal trustee
and agency services. The deal is also part of U.S. Bank's strategy
to make opportunistic investments in order to further enhance its
corporate trust services. Further, the MN-based bank will be
committed to provide high-quality services, which it is known for,
to the acquired clients.
According to Deutsche Bank, the partnership with U.S. Bank will be
profitable as it will provide a better platform to serve clients
with the help of U.S Bank's expertise.
U.S. Bancorp seems to be on an acquisition spree. In Mar 2012,
U.S. Bank National Association, acquired the Indiana corporate
trust business of UMB Bank - a subsidiary of UMB Financial
Corporation ( UMBF ). In the same
month, it inked a definitive agreement to buy its institutional
trust business from Union Bank, N.A. - a subsidiary of UnionBanCal
Corp., which is owned by Mitsubishi UFJ Financial Group
Inc. ( MTU
In Feb 2012, through its lead bank, U.S. Bancorp acquired the
banking operations of BankEast, a subsidiary of BankEast
Corporation, in a deal assisted by the Federal Deposit Insurance
U.S. Bancorp has a well-balanced business model, with non-interest
revenue representing nearly half of its total revenue. Its results
have been driven by a combination of acquisitions and organic
growth. Also, we expect continued investments in core banking and
fee-based operations to generate long-term revenue growth.
Going forward, we expect U.S. Bancorp to benefit from its
diversified revenue base and strategic acquisitions, thereby
posting growth in core earnings going forward. Yet, a tardy
economic recovery and a low interest rate environment, along with
regulatory issues, remain our concerns.
U.S. Bancorp shares carry a Zacks Rank #3 (Hold).