Citigroup launches third party clearing in Australia using GBST Shares™ platform June 27, 2005
Citigroup Global Transaction Services and leading Australian financial technology provider, GBST Holdings Limited, today announced that Citigroup has entered the Australian third party clearing market using GBST’s Shares™ platform.
The new service enables Citigroup’s broker dealer clients to trade securities listed on the Australian Stock Exchange (ASX) from offshore locations.
Clients are able to place their trades directly on the ASX via their own SEAT terminals or by using infrastructure provided by Citigroup, which also manages clearing and settlement of those transactions through GBST’s Shares™ platform.
Citigroup’s third party clearing service is targeted at those securities firms wanting to access the Australian market without establishing a local presence or infrastructure, as well as Australian brokers looking to achieve cost-savings by outsourcing their securities back-office operations to a third party clearer.
Mike Sleightholme, Clearing Head of Citigroup Global Transaction Services, said third party clearing services are of great interest to securities firms at a time when cost management is an industry-wide priority.
“With 35 percent of all ASX trades by volume and value originating offshore, our new third party clearing service has the potential to deliver significant savings to offshore institutions” he said.
“By leveraging our existing custody business to offer third party clearing services, Citigroup can generate economies of scale that also makes it a compelling proposition for other ASX market participants to outsource their back office operations to us”.
Mr Sleightholme added that outsourcing of back office operations allows securities firms to manage costs and focus on their key competencies such as research, trading and investor servicing.
GBST CEO and Managing Director, Stephen Lake, said he was delighted that Citigroup had selected GBST as its technology partner.
“The advanced design and automation of GBST’s technology allows it to meet a diverse range of client needs within the Australian market, as well as those in other overseas markets," he said.
“Outsourced clearing is standard practice in US and European markets and we believe Australia will also benefit from the efficiencies this model provides. Citigroup’s offering will result in a more competitive market and enable brokers to find the service that best suits their needs”.
Mr Lake also said that GBST would continue to look for similar opportunities to introduce technology efficiencies into other markets and increase its market share in securities processing and third party and regional clearing in Australia, as well as in new geographic areas such as the Asia Pacific.
The ASX introduced offshore market participant rules in March 2004 that allowed qualified foreign applicants to be trading participants without needing a physical presence in Australia. However, foreign trading participants are required to clear and settle through an approved domestic third party clearer, such as Citigroup.
Citigroup® Global Transaction Services is a leading provider of integrated cash management, trade and securities services for corporations, financial institutions, intermediaries and governments around the world. With over $ 139 billion in average liability balances, more than $7.9 trillion in assets under custody and the largest proprietary branch network, Citigroup’s award-winning operating systems and Internet-based delivery channels enable clients to manage and monitor working capital and investments more efficiently, streamline transaction processing cycles, and re-engineer receivables and payment processes. Citigroup® Global Transaction Services provides clients with access to Citigroup’s full range of capabilities and solutions along with an on-the-ground presence and in-depth knowledge of more than 90 local markets. For additional information, see www.transactionservices.citigroup.com
About Citigroup
Citigroup (NYSE: C), the pre-eminent global financial services company with some 200 million customer accounts in more than 100 countries, provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, insurance, securities brokerage, and asset management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Travelers Life and Annuity. Additional information may be found at: www.citigroup.com
About GBST
Established in 1983 GBST (Global Banking and Securities Transactions) is the largest provider of securities transaction processing in Australia and a leading provider of transaction solutions for the financial services industry. GBST Shares™, the trading, clearing, and settlement system preferred by the majority of Australian stockbrokers, processes up to half of all daily trades on the Australian Stock Exchange and also facilitates cross-border trading in New Zealand and Hong Kong.
GBST’s core competence is real time integrated transaction processing which provides the capability to increase revenues, reduce costs, for a wide variety of market participants including: global investment banks, custodians, clearers, stockbrokers, exchanges, margin lenders, and cash management providers. With offices in Brisbane, Sydney, Adelaide, Melbourne, and Hong Kong, GBST has over 130 staff committed to providing advanced transaction solutions.
www.gbst.com
Newsroom
GBST IPO Closes - Over Subscribed June 14, 2005
GBST Holdings Limited, Australia's largest provider of trading, clearing and settlement solutions, has announced its initial public offer has closed over subscribed.
The company, which plans to list on the Australian Stock Exchange (ASX) on [28] June, raised $10 million by offering 10 million shares at $1.00 each. Of the funds raised $4 million will be used to facilitate GBST’s continued growth.
ABN AMRO Morgans Corporate Limited managed the offer, which gives GBST a market capitalisation at the offer price of $44 million.
GBST’s Managing Director and Chief Executive Officer, Stephen Lake, said the company is strongly positioned for further growth.
“With greater expansion anticipated for Australia's financial services sector, including forecast growth in equities, derivatives and securities, GBST represents an attractive investment opportunity to shareholders,” he said.
Anthony Kirk, from ABN AMRO Morgans Corporate Limited, said the market had responded well to GBST’s offer.
“Investors were particularly receptive to this offer because they appreciated how the company will benefit from growth in Australia’s financial services sector,” he said.
Since being founded in 1983, GBST has established itself as a major technology partner for Australian and international capital market participants, as well as the broader financial services industry.
Almost half of Australia’s stockbrokers now use GBST’s specialist market access and transaction processing solutions, with the company processing around $40 billion of ASX trades per month.
Offer price $1.00 per Share Shares offered under this prospectus 10,000,000 Total number of shares on issue following the Offer 44,000,000 Amount to be raised under the offer $10,000,000 Market capitalisation at the Offer price $44,000,000
Summary financial information
Actual June 2004 (12 mths) $’000 Unaudited Forecast June 2005 (12 mths) $’000 Total Revenue 21,295 21,924 Total Operating Expenses 17,289 17,076 EBITDA 4,006 4,848 EBIT 3,217 4,261 Profit before tax 3,441 4,516
Established in 1983, GBST (Global Banking and Securities Transactions) is the largest provider of securities transaction processing in Australia and a leading provider of transaction solutions for the global financial services industry. GBST Shares™, the trading, clearing, and settlement system preferred by the majority of Australian stockbrokers, processes up to half of all daily trades on the Australian Stock Exchange and also facilitates cross-border trading in New Zealand and Hong Kong.
GBST’s core competence is real time integrated transaction processing which reduces costs and the need for and risks to capital for a wide variety of market participants, including: global investment banks, custodians, clearers, stockbrokers, exchanges, margin lenders, and cash management providers. With offices in Brisbane, Sydney, Adelaide, Melbourne, and Hong Kong, GBST has over 130 staff committed to providing advanced transaction solutions.
