State Street to buy Santander's Latin America custody arm as Q3 EPS jumps 33%
What's the deal? State Street has agreed in principle to acquire Santander CACEISDealroom has a profile for this one. Try Dealroom →'s Latin American securities services business, the Boston-based custody bank disclosed alongside its third-quarter 2026 results. The deal value was undisclosed.
Why now? State Street reported broad-based growth in the quarter and is leaning into expansion. Earnings per share rose 33% to $3.69, while total revenue climbed 13% to $4 billion.
Where it expands: The acquisition would widen State Street's footprint across Brazil, Mexico, and Colombia. Subject to regulatory approval and closing conditions, it is expected to complete in 2027.
By the numbers: Net interest income grew 21% to $864 million, driven by a 16-basis-point rise in net interest margin to 1.12%. Assets under custody and administration hit a record $59.2 trillion, and assets under management reached a record $6.3 trillion.
What's the endgame? The deal fits a push into custody, alternatives, and wealth services. Servicing fees rose 10% to about $1.5 billion, while management fees grew 20% to a record $797 million.
Raised guidance: Management lifted its 2026 outlook, now expecting fee revenue growth of 13%-14%, up from 12%-13%, and net interest income growth of 15%-16%, up from 14%-15%. The company expects positive operating leverage above 500 basis points.
What could go wrong? The digital assets infrastructure State Street is building still awaits regulatory approval, with unresolved questions around settlement, liquidity, and market rules. Servicing fee sales may also prove lumpy, as some deals expected to close in the fourth quarter could slip into early 2027.
The signal: Custody banks are consolidating as scale increasingly determines who wins mandates in securities servicing. By buying into Latin America and courting registered investment advisers at home, State Street is betting that geographic reach and cross-business synergies will keep fee revenue compounding.
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Image credit: (vincent desjardins)
