State Street to Acquire Mizuho Financial Group’s Global Custody Business

Rhea-AI Summary

State Street (NYSE: STT) has announced an agreement to acquire Mizuho Financial Group's global custody and related businesses outside of Japan. The acquisition includes Mizuho's operations through Mizuho Trust & Banking (Luxembourg) and Mizuho Bank (USA), representing combined assets under custody of approximately $580 billion and $24 billion in assets under administration.

The transaction, expected to complete by Q4 2025, will allow Mizuho to focus on providing trust and custody services for domestic assets while collaborating with State Street for global services. State Street, with 35 years of experience in Japan and Luxembourg, will leverage its global platform to serve Mizuho's clients, offering services including data management, risk and performance analytics, currency management, and securities finance.

Positive

• Significant AUC acquisition: $580B assets under custody
• Additional $24B in assets under administration
• Expands State Street's presence in key markets: Japan, Luxembourg, USA
• Leverages existing infrastructure with 35-year presence in Japan and Luxembourg

Negative

• Long completion timeline extending to Q4 2025
• Integration risks with existing operations
• Subject to multiple regulatory approvals

Insights

Financial Services Analyst

State Street's acquisition of Mizuho's global custody business represents a strategic scaling opportunity that instantly adds $580 billion in assets under custody and $24 billion in assets under administration to their platform. This transaction strengthens State Street's competitive position in the custody business where scale is critical for operational efficiency and technology investment.

The deal provides three key advantages: immediate access to Japanese institutional clients without the high cost of organic client acquisition; enhanced operational scale that should improve margin efficiency across their existing platform; and stronger positioning in Luxembourg, an essential European fund domicile. For custody businesses, technology infrastructure costs are largely fixed, meaning this additional $580 billion in assets should drive incrementally higher margins as it's integrated into State Street's existing systems.

The timing is particularly strategic as global financial institutions increasingly outsource non-core functions to specialized providers with greater scale advantages. By maintaining the domestic Japanese custody while transferring the more complex global custody operations, Mizuho demonstrates the heightened importance of technological scale in cross-border asset servicing. For State Street investors, this represents a textbook example of leveraging core competencies through acquisition rather than more expensive organic growth.

Global Banking Expert

This transaction exemplifies the ongoing consolidation in global custody services where scale and technological capabilities determine competitive advantage. State Street gains immediate entrée to Japanese institutional investors' international portfolios without disrupting their domestic arrangements - a delicate balance that respects cultural preferences while optimizing operational efficiency.

The multi-jurisdictional nature of this deal - spanning Japan, Luxembourg and the US - demonstrates State Street's regulatory savvy and operational flexibility. Luxembourg's position as Europe's leading fund domicile makes the acquired Luxembourg entity particularly valuable for servicing Japanese investors' European exposures. With its 35-year presence in both Japan and Luxembourg, State Street possesses the cultural competence and regulatory relationships to navigate this complex integration.

The collaboration model where Mizuho retains domestic Japanese custody while partnering with State Street for global assets creates a complementary arrangement that maximizes each institution's strengths. This partnership approach, rather than complete divestiture, suggests potential for ongoing client referrals and business development between the firms. For State Street, beyond the immediate $580 billion in assets, the real value lies in the potential to cross-sell additional services - data analytics, currency management, securities lending - to these institutional clients, substantially increasing revenue per client relationship.

TOKYO--(BUSINESS WIRE)-- State Street Corporation (NYSE: STT) and Mizuho Financial Group, Inc. (President & Group CEO: Masahiro Kihara) today announced they have entered into an agreement for State Street to acquire Mizuho’s global custody and related businesses outside of Japan. These businesses support the overseas investments of Mizuho’s Japanese clients.

Mizuho currently operates its global custody and related business outside of Japan through its local subsidiaries Mizuho Trust & Banking (Luxembourg) S.A., owned by Mizuho Trust & Banking Co., Ltd., and Mizuho Bank (USA), a wholly-owned subsidiary of Mizuho Bank, Ltd. Both of these entities represent combined assets under custody of approximately US$580 billion and US$24 billion in assets under administration¹.

After this transaction, Mizuho will leverage its expertise and network as one of Japan’s largest financial institutions to continue providing Japanese clients with trust and custody services for their domestic assets and will collaborate with State Street for global custody and related services.

“Japan, Luxembourg and the United States are all important markets to State Street. This transaction demonstrates our strong commitment to further accelerating our growth in these markets,” said Stefan Gmür, head of Asia Pacific and head of Strategic Business Growth at State Street. “Mizuho’s decision to entrust State Street with their valued clients affirms their confidence in our high-quality client service, industry-leading capabilities and commitment to product innovation and technology investment. With 35 years of experience on the ground in both Japan and Luxembourg, and our long history in the United States, State Street is well positioned to support Mizuho clients’ global growth and business transformation.”

“In today's increasingly complex investment landscape, clients require global custody providers with significant scale and expertise,” said Tsutomu Yamamoto, senior executive officer, head of Global Transaction Banking Unit at Mizuho. “After careful consideration, we have decided to transfer our global custody business to State Street, a recognized leader with a long-established presence in Japan. This strategic move will ensure our clients benefit from State Street's global platform and deep expertise.”

“Having deep familiarity with the requirements and expectations of Japanese institutional investors, we look forward to meeting their needs not only in global custody but also data management, risk and performance analytics, currency management and securities finance,” said Hiroshi Kobayashi, head of Japan at State Street. “We expect to provide a seamless transition for Mizuho’s clients. As the acquired business integrates into our global operating model, we expect the added scale will allow us to further expand our technology and service capabilities, which will enhance the service experience for our existing and new clients in Japan.”

The transaction is expected to be completed by Q4 2025, subject to the regulatory approvals and other closing conditions.

State Street established its business in Japan more than 35 years ago. With an experienced team of more than 500 employees in Japan, split between locations in Tokyo and Fukuoka, State Street provides Japanese institutional investors with a comprehensive suite of services including trust, global custody, middle/back office outsourcing, data management, trading and financing solutions. State Street has an operational centre of excellence in Fukuoka which has been supporting clients in Japan and across Asia Pacific for over a decade. State Street has been present in Luxembourg for 35 years providing services including fund administration, custody and transfer agency. From its headquarters in Boston, Massachusetts, State Street operates globally in more than 100 geographic markets.

¹ Source: Mizuho, as of December 31, 2024

About State Street Corporation

State Street Corporation (NYSE: STT) is one of the world's leading providers of financial services to institutional investors including investment servicing, investment management and investment research and trading. With US$46.6 trillion in assets under custody and/or administration and US$4.7 trillion* in assets under management as of December 31, 2024, State Street operates globally in more than 100 geographic markets and employs approximately 53,000 worldwide. For more information, visit State Street's website at www.statestreet.com.

*Assets under management as of December 31, 2024, includes approximately US$82 billion of assets with respect to SPDR® products for which State Street Global Advisors Funds Distributors, LLC (SSGA FD) acts solely as the marketing agent. SSGA FD and State Street Global Advisors are affiliated.

About Mizuho Financial Group

Mizuho Financial Group, Inc. is one of the largest, full-service financial institutions in the world, with approximately 65,000 employees, 150 years of banking experience, and total assets of approximately US$2 trillion, according to S&P Global 2024. Mizuho offers comprehensive financial services to clients in 36 countries and 850 offices throughout the Americas, EMEA, and Asia.

Mizuho combines extensive industry and local market expertise with a broad geographic presence and is a leading provider of retail banking, corporate and investment banking, capital markets, strategic advisory, fixed income, equities, research, and financing solutions. For more information, visit www.mizuhogroup.com.

FORWARD LOOKING STATEMENTS

This News Release contains forward-looking statements within the meaning of United States securities laws, including statements about our goals and expectations regarding State Street’s planned acquisition of Mizuho’s global custody and related businesses outside of Japan, as well as State Street’s strategy, growth and sales prospects, business, financial and capital condition, the financial and market outlook and the business environment, in each case both associated with the planned acquisition or otherwise. Forward-looking statements are often, but not always, identified by such forward-looking terminology as “will,” “expect,” “further,” “forward,” “intend,” “aim,” “outcome,” “future,” “strategy,” “pipeline,” “trajectory,” “target,” “guidance,” “objective,” “plan,” “forecast,” “believe,” “anticipate,” “estimate,” “seek,” “may,” “trend,” and “goal,” or similar statements or variations of such terms. These statements are not guarantees of future performance, are inherently uncertain, are based on current assumptions that are difficult to predict and involve a number of risks and uncertainties. Therefore, actual outcomes and results may differ materially from what is expressed in those statements. important factors that could cause actual results to differ materially from those indicated by any forward-looking statements are set forth in State Street’s 2024 Annual Report on Form 10-K and its subsequent SEC filings. State Street encourages investors to read these filings, particularly the sections on risk factors, for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this News Release should not by relied on as representing State Street’s expectations or beliefs as of any time subsequent to the time this News Release is first issued, and State Street does not undertake efforts to revise those forward-looking statements to reflect events after that time.

© 2025 State Street Corporation

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Media Contact:

Kate Cheung

+852 3556 1103

Kate.cheung@statestreet.com

Source: State Street Corporation

FAQ

What is the total value of assets under custody being acquired by State Street (STT) from Mizuho?

State Street is acquiring approximately $580 billion in assets under custody and $24 billion in assets under administration from Mizuho's global custody business.

When is the State Street (STT) acquisition of Mizuho's global custody business expected to close?

The transaction is expected to be completed by Q4 2025, subject to regulatory approvals and other closing conditions.

Which Mizuho subsidiaries are included in State Street's (STT) acquisition?

The acquisition includes Mizuho Trust & Banking (Luxembourg) S.A. and Mizuho Bank (USA)'s global custody operations.

How will the Mizuho acquisition impact State Street's (STT) operations in Japan?

The acquisition will expand State Street's presence in Japan, adding scale to their existing operations of 500 employees across Tokyo and Fukuoka.