Northern Trust says it's ‘fully committed to remaining independent' after report of possible BNY merger

New York Post

4 days ago

Northern Trust on Monday shut down any talk of a possible merger with Bank of New York Mellon.
'I can tell you that Northern Trust is fully committed to remaining independent and continuing to deliver long-term value to our stakeholders, as we have for the past 135 years,' a spokesperson for the bank told The Post in a statement.
That pushback came a day after the Wall Street Journal reported that BNY had approached Northern Trust last week to express interest in a deal.
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Bank of New York Mellon reportedly approached Northern Trust last week to express interest in a deal.
REUTERS
The chief executives of both banks had at least one conversation, but there was no specific offer on the table, sources told the Journal. BNY was considering whether to submit a formal bid, according to the report.
BNY did not immediately respond to The Post's request for comment.
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A merger between BNY, the world's largest custodian bank, and Northern Trust would reshape the asset management sector. Combined, the two banks oversee more than $3 trillion.
Shares in Northern Trust jumped 7% as Wall Street analysts argued that a deal could be mutually beneficial, depending on the price.
'There are strategic benefits to BNY from this potential combination and also to Northern Trust,' JP Morgan analyst Vivek Juneja wrote in a research note.
'Key would be the price paid which would determine the financial impact on both companies' shareholders because a high price would hurt both.'
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The deal could strengthen BNY's wealth management business and help Northern reduce its technology expenses, Juneja added.
BNY is reportedly considering whether to submit a formal bid to acquire Northern Trust.
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Shares in Northern Trust have risen about 9% so far this year, pushing the Chicago-based firm to a market value above $21 billion.
BNY has a market cap of more than $65 billion. Its shares have rallied more than 50% over the past year, thanks to a turnaround plan led by CEO Robin Vince that has boosted profit and revenue.
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'Any deal would have to clear antitrust hurdles' though, Rajiv Bhatia, analyst at Morningstar said, adding that State Street, JPMorgan and Citigroup are still major competitors.
Analysts at Keefe, Bruyette & Woods said in a note they see a low probability of this merger getting done.
It's unclear whether Northern Trust has any interest in selling, and even in that case, the merger would likely face large antitrust roadblocks, the note said.
'We believe the bar is soon to be lowered for larger bank mergers, this potential deal would involve a Category 1 bank and a Category 2 bank, which may still face a higher hurdle than two super-regional banks,' the note from David Konrad said.
The Trump administration has painted itself as a more deal-friendly one — already approving Capital One's $35 billion takeover of Discover.