BNY Mellon scouts for partners in AMC biz

MUMBAI: Bank of New York Mellon Bank ( BNYMB) is looking at business opportunities in India in asset management and custodial services and is seeking domestic partnerships in these two areas.

BNYMB, which has a representative office in Mumbai and has applied for a banking licence, is in talks with potential partners for both. The bank is exploring the asset management space and is interested in investing in an asset management company. It is also looking at white labelling of international funds which invest in global equities.

The fund could tie up with local mutual funds which could then act as feeder funds. The other business opportunity which the bank is looking at is its trustee services for acting as an agent and security trustee for corporate bond issuers.
While the bank has been in discussions for a stake in asset management companies, high valuations are an impediment.

Despite the stringent norms on charges to the fund and restrictions on offerings of liquid funds, promoters are quoting a high price as Indian markets continue to be the flavour of the season. As on end July, there were 43 mutual funds with Rs 66,556,742 crore assets under management.

In custody, the total assets under custody in India are growing at a compounded annual growth rate of 30-35% and are currently valued at approximately $300 billion. Even in an environment where most securities are held in a dematerialised form, there are opportunities for custodians in debt and equity. The custodian ensures that various value-added services are offered in custody and accounting, including transaction settlement.

BNYMellon operates globally in specialised areas and is not a regular commercial bank like Citi. The services it provides are in the areas of payments, trade, asset management, asset servicing, which includes custodial services and securities lending. It also does issue services, which include depository receipt services, corporate trust services for debt issuance programmes and also wealth management services.

BNYB was created in 2007 following the merger of Mellon Financial Corporation and The Bank of New York Company. The New York headquartered bank has $21.8 trillion in assets under custody or administration and $1 trillion under management.

Incidentally, BNYM was earlier in talks with State Bank of India for a joint venture providing custodial services before SBI tied up with Societe Generale Securities Services. The talks with SBI fell through as the US bank was keen on a higher stake than what was offered. SBI subsequently entered into a 65:35 JV with SocGen.