State Street (STT) to Take Full Ownership of Another India JV
Continuing with its efforts of streamlining its operating model in India, State Street Corporation STT has announced that it is finalizing its plan of assuming full ownership of its joint venture (“JV”) with HCLTech. The consolidation, expected to be completed in the second quarter of 2024, is part of the company's ongoing transformation and productivity initiatives to optimize its global operations.
Notably, Statestreet HCL Services, formed in 2012, has grown into a valuable servicing and operational center for the firm and its clients.
The move to bring State Street HCL Services’ capabilities and in-house expertise is expected to create a more simplified model to facilitate faster decision-making, and a more effective and efficient experience for clients.
Mostapha Tahiri, the executive vice president and incoming COO of State Street, stated, “This integration is a natural evolution of our successful relationship with HCLTech, which remains a strategic technology partner. By creating additional scale, we remain committed to further advancing our operational model with client needs at the center.”
Srinivasan Seshadri, the chief growth officer and global head, Financial Services, HCLTech, said, “State Street continues to be one of our strategic and top 15 clients in IT. We are proud of the collaboration over the past eleven years and look forward to our continued partnership across key priority areas of State Street.”
STT has been deeply rooted in India for a long time. A couple of months ago, it announced its decision to assume full ownership of another India JV, a JV with the Atos Group, initially established with Syntel, Inc.
STT’s global operating model, with multiple locations spanning North America, Europe and Asia, ensures continuity of service, resiliency and reduced operational risk.
In an effort to further expand its footprint in Latin America, in July 2023, State Street announced its foray into Colombia. This will enable the company to scale its servicing capabilities for institutional clients in the region. By setting up operations in Colombia, the company further expands its reach in the Latin America region, scaling "upon its first-in-class client capabilities."
State Street is also expanding its scale by undertaking strategic acquisitions. This March, the company announced an agreement to acquire CF Global Trading to further expand outsourced trading capabilities. This, along with past buyouts, is expected to result in revenue and cost synergies, and help STT expand its footprint across the globe.
Over the past six months, shares of State Street have gained 3.2%, underperforming the industry’s rally of 11%.
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Currently, STT carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Other Finance Firms Focused on India Expansion
India is generating a lot of interest among global financial firms. In 2023, two major well-known global names announced their expansion in the country.
HSBC Holdings plc HSBC relaunched its Global Private Banking business in India. The lender was exploring options of re-entering India’s markets for a year, as the country has been experiencing a surge in the number of the super-rich.
HSBC exited India’s private banking business in 2015 as part of a group strategy. However, in November 2021, Nuno Matos, the CEO of HSBC’s Wealth and Personal Banking division, said the bank was exploring re-entering onshore private banking in India.
Now, with the re-launch of its private banking operations in India, HSBC targets to serve high-net-worth and ultra-high-net-worth professionals, entrepreneurs and their families. The business will be aimed at clients with investable assets of more than $2 million.
Also, Jio BlackRock, a JV between BlackRock Inc. BLK and Jio Financial Services Limited (“JFS”), is set to revolutionize India's asset management industry. This 50:50 partnership brings together the scale and investment expertise of BLK, a globally renowned asset manager, with the local market knowledge and digital infrastructure capabilities of India-based JFS.
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