Why Bank of New York Mellon Wants To Buy Northern Trust

June 24th, 2025 by Trefis Team
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Bank of New York Mellon

Custodial banking giant Bank of New York Mellon (NYSE:BK) is exploring a potential deal to acquire Northern Trust, according to a report in The Wall Street Journal. So, is a deal going to actually happen? Not yet. The two CEOs have spoken, but there has been no formal offer on the table. Northern Trust has also indicated via a spokesperson it wants to stay independent. That said, there are a lot of potential upsides if the two firms do come together, given their scale in the asset-servicing world, the door probably isn’t closed, especially if BNY comes up with a compelling offer. So why does this deal make sense for BNY?

Upsides From A Deal

For BNY, the logic is fairly simple: bigger scale, more clout, and significant cost savings. Both companies offer a similar suite of services including safeguarding assets, settling trades, managing cash, and providing wealth and asset management services.  Combining with Northern Trust would create an investment services heavyweight. BNY already has $53 trillion in assets under custody, making it the world’s largest custodial bank, and coming together with Northern Trust’s client base and capabilities would make the combined firm a much stronger force.

The combined company would also have over $3 trillion in assets under management, allowing them to take on asset-management giants such as BlackRock and Vanguard. There’s also an efficiency angle. The deal would bring about considerable cost synergies, mostly by consolidating technology platforms, trimming overall headcount, and reducing overlapping real estate holdings. And BNY is probably in a good position to do this under CEO Robin Vince whose turnaround plan for the company has driven the stock up almost 50% in the past 12 months. BNY’s financial performance has also been stronger than expected in recent quarters. related: Is Neobank Chime Stock A Buy?

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But It Won’t Be Easy

Northern Trust must first agree to a sale. After the story broke, the company said it was committed to staying independent. Then there’s regulation. Although the Trump administration is viewed as being friendlier to big mergers in the financial services space, considering the recent approval of the Discover-Capital One deal, BNY is a globally systemic bank and that might translate into a bit more scrutiny. The two companies’ dominant positions in the custodian and asset servicing sectors could also raise antitrust concerns.  Bank of New York Stock fell by about 2% in Monday’s trading, indicating that investors may not be fully sold on a potential deal.

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