Intesa Sanpaolo SpA (ISP.MI) said Tuesday it has sold its securities services business to U.S. financial services company State Street Corp. (STT) for EUR1.75 billion.

In a statement sent to the Italian stock exchange, the Milan-based lender said it has sold its global custody, fund administration, depository bank as well as correspondent bank. It said local custody isn't for sale as this activity is part of the intermediation services offered to its customers.

Intesa Sanpaolo, Italy's largest retail bank with over 6,000 branches, said it will book a gross capital gain of around EUR740 million and the deal will boost its Tier 1 ratio.

Rothschild SpA and Banca IMI advised Intesa Sanpaolo on the deal.

-By Sabrina Cohen, Dow Jones Newswires; +39 02 5821 9906; sabrina.cohen@dowjones.com
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