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The $16.5 billion deal between Bank of New York and Mellon Financial that was announced on Dec. 4 would create one of the world's largest and strongest custodians of financial assets and bolster the merged entity into the top ten asset-management firms.
The proposed Bank of New York Mellon would have $16.6 trillion in assets under custody, and another $1.1 trillion in assets under management. Its closest trailing custodian competitor, JPMorgan Chase, oversees $12.9 trillion. The $4.4 trillion Mellon brings to the table vaulted Bank of New York past JPMorgan.
The merger pieces together two key drivers: Bank of New York's asset servicing, which is significantly larger than Mellon's, and Mellon's asset management, which is significantly larger than Bank of New York's. The new entity has muscle in custodial and other back- office services, as well as money management.
The complementary nature of the two businesses is what Roger Hartley, managing director at Putnam Lovell NBF Securities in San Francisco, finds most...