Bank of New York Overview: In 2007, The Bank of New York merged with Mellon Financial Corporation, creating Bank of New York Mellon. Headquartered in New York, the company also has major operations in Pittsburgh, PA. It is a leading asset management, wealth management and securities services company whose principal asset management subsidiaries include:
- Alcentra
- The Boston Company
- The Dreyfus Corporation
- EACM Advisors LLC
- Franklin Portfolio Associates LLC
- Hamon Investment Group
- Ivy Asset Management
- Mellon Capital Management
- The Newton Group
- Pareto
- Standish
- Urdang
- Walter Scott & Partners
Other Bank of New York operations include:
- Custody, Trustee and Depository Services
- Portfolio Accounting and Investment Analytics
- Securities Lending
- Investment Operations and Back Office Outsourcing
- Securities Clearance
- Client Data Management
- Mutual Fund Transfer Agency
- Collateral Management Services
- Wealth Management, Private Banking and Estate Planning
- Broker-Dealer and Advisor Services
- Issuer Services
- Treasury Services
Size: Bank of New York reports these figures as of June, 2008:
- Employees = 43,100
- Assets = $201.2 billion
- Assets Under Management = $1.1 trillion
- Assets Under Custody or Administration = $23 trillion
- Value of Outstanding Debt Serviced = $12 trillion
- Locations in 6 Continents and 34 Countries
- Clients Include 85% of the Fortune 500
- Clients Include 60% of the Fortune 1,000
- Clients Include 70% of the Global 500
Positives: Bank of New York reports positive earnings through the first half of 2008. Nonetheless, the firm is slated to receive an equity infusion of $2-3 billion from the federal government as part of the financial rescue plan, which will further solidify its financial position.
Employment has been growing at Bank of New York. Headcount is up 2,500 or 6.2% since September, 2007.
Bank of New York has exited its original retail and commercial banking business, deciding to focus instead on the other lines of business listed above, which have long since become its core competencies.
On October 13, 2008, the Treasury Department granted Bank of New York a 3 year contract to serve as custodian of the Troubled Asset Relief Program (TARP) authorized under the $700 billion financial rescue bill known officially as the Emergency Economic Stabilization Act. Bank of New York also will provide accounting, auction management, pricing, valuation and other infrastructure services. Bank of New York was one of 70 firms to submit bids, of which 10 were deemed qualified by the Treasury Department.
Negatives: Bank of New York, as a major player in services involving counter party risk (that is, risk that one party will fail to make promised delivery of securities or cash), has some potentially large exposures. However, the unprecedented actions taken by the federal government in October, 2008 to insure such activities should minimize the associated risk.
