JTC buys Citi Trust for $80m

JTC said Citi Trust provides a full suite of fiduciary solutions and has extensive cross-border experience, operating from seven high-quality trust jurisdictions globally including New York and Switzerland, among others.

The total assets under administration serviced by Citi Trust are in excess of $70bn.

JTC said it’s "highly complementary" to its existing footprint and cements the company’s position as "the leading independent provider of global trust services".

The acquisition is expected to deliver mid-single digit earnings per share accretion in 2025 and high single digit EPS accretion in 2026, the first full year of ownership.

JTC chief executive Nigel Le Quesne said: "Citi Trust is one of the most established and well-respected providers of trust services globally and we are delighted to have been chosen as the future custodian of its employees and clients. The acquisition is extremely complementary to JTC's existing footprint.

"It is a transformational transaction for the group and our private client services division, increases our presence in key growth markets in the US, Europe and Asia, and brings further resilient annuity driven revenue to the group.

"We look forward to welcoming their highly experienced team to JTC, so that together we can capture the future growth opportunities that the global trust administration market offers."

At 0940 BST, the shares were up 1.8% at 1,112p.

Berenberg, which rates the shares at 'buy', lifted its price target to 1,400p from 1,300p.

"Strategically, the deal builds upon JTC’s already-established trust platform, particularly in the US (following the acquisitions of New York Private Trust Company, South Dakota Trust Company and First Republic Trust Company), and marks a significant positive shift in the group’s profile given Citi Trust’s reputation as one of the oldest and most established fiduciary business globally," it said.

"Financially, the deal terms are compelling...with clear commercial and cost synergies to be had over the coming years. We expect completion at the end of H125, and upgrade our EPS forecasts by circa 3% in FY25 and c10% in FY26. We moved our price target recently (to 1,300p from 1,150p), acknowledging JTC’s future M&A pipeline and compounding track record; however, the strength of today’s announcement means we move the price target again, to 1,400p, to reflect 1) a not unreasonable FY26 price-to-earnings of 22x, when more of the acquisition’s benefits will be felt following integration, and 2) the quality at hand."