BNY Mellon corporate trust unit reportedly on the block


BNY Mellon (BK +2.1%) has hired Goldman Sachs to find a buyer for the unit, reports Bloomberg, and is expected to begin receiving offers in about a month. The corporate trust arm assists companies with making payments on debt they issue as well as helping customers recover funds in event of default.

The business services about $12T in outstanding debt, with 3.5K employees at 61 global offices, but has become less lucrative since the financial crisis made the packaging and selling of loans a more difficult business. Possible buyers could be large commercial banks looking to build out their own trust business such as Bank of America (BAC), U.S. Bancorp (USB), Wells Fargo (WFC), or PNC Financial, says Guggenheim's Marty Mosby.

On a recent earnings call, BNY management said run-off in the unit would cut annual revenue by $50M-$75M annually, roughly 0.5% of total bank revenue.

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Comments (1)
  • TBV
    , contributor
    Comments (184) | Send Message
     
    With all the TBTF BS, dont expect large banks to step up to show interest. Thanks to Obama, buying and sellling with your money, you need to get approvals.
    24 Apr 2014, 03:13 PM Reply Like
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