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It was originally set up when banks could not perform Trust Company services. A consortium of banks all invested in a new trust company, which was called Bankers Trust, so that they could refer clients to that company knowing that Bankers Trust would not try and poach their customer. Under the management of Charlie Sanford, Bankers Trust became a leader in the nascent derivatives business in the early 1990s. However, some derivative transactions proved costly to clients, and two clients (Gibson Greetings and Proctor & Gamble) successfully sued BT, asserting that they had not been informed of or the latter case had been unable to understand the risks involved. The resulting reputational damage, combined with the lack of a natural client base and the inept management of new CEO Frank Newman, eventually proved fatal. In Australia, Bankers Trust was acquired by Westpac Banking Corp and uses the name BT Financial Group. |
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