BNY has approached Northern Trust to discuss a potential merger, reports The Wall Street Journal (WSJ) (paywalled). If the deal works out, it might create an investment management giant that oversees more than US$3 trillion.
WSJ reveals that the chief executives of both banks “had at least one conversation”. No specific offer has been discussed, but BNY might get back to Northern Trust with a formal bid.
Northern Trust’s Q1 2025 results showed US$16.9 trillion in assets under custody/administration while BNY reported US$53.1 trillion, as covered here. A successful merger would mean that together, the two entities will oversee US$70 trillion. That’s close to 50 per cent larger than the custodian in second position – State Street, at US$46.7 trillion AUC/A, based on Q1 2025 results.
The race is on
The widening gap between BNY and State Street is likely to become a sore point for the latter. In 2021, State Street made a bid to topple BNY from the top position by attempting to acquire Brown Brothers Harriman (BBH). The deal eventually failed after a long-drawn process that took up most of 2022. Regulatory limitations were cited. In 2024, State Street made another attempt at a merger – if rumours about its interest in Societe Generale Securities Services (SGSS) were to be believed – but there has since been no further talk about that deal.
According to WSJ, the Trump administration “has signalled more willingness to approve big bank deals”, which might give BNY a better chance of success with its acquisition today than State Street had four years ago, but the publication’s sources cautioned that the talks might not result in a transaction.
Northern Trust currently has a market value of more than US$21 billion after its share price rose nine per cent year-to-date. BNY’s shares have risen by more than 50 per cent in the past year, driving the company’s market capitalisation up to more than US$65 billion.
