Bank of New York
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| The Bank of New York | |
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| Type | Subsidiary |
| Founded | New York, New York 1784-06-09 |
| Headquarters | New York, New York |
| Key people | Tom Renyi, Chairman of the Board Robert P. Kelly, CEO Gerald Hassell, President Alexander Hamilton, founder |
| Industry | Financial services |
| Products | Financial services |
| Revenue | ▲US$8.312 Billion (2005) |
| Net income | ▲US$2.039 Billion (2007) |
| Owner | Bank of New York Mellon |
| Employees | 42,100 (2007) |
| Website | www.bnymellon.com |
The Bank of New York, abbrieviated BNY, ticker symbol BK, was a global financial services company that existed until its merger with the Mellon Financial Corporation on July 2, 2007.[1] The bank now continues under the new name of The Bank of New York Mellon Corporation. The BNY operated in four primary business areas (which it still continues to do):
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[edit] History
The Bank of New York was founded by Alexander Hamilton on June 9, 1784[2], making it the oldest bank in the United States. He wrote the new bank's constitution, and became the individual most actively involved in the organization of The Bank of New York, guiding it through its early stages. The bank opened for business at the Walton House in Lower Manhattan only a few months after the departure of British troops from American soil. It opened with a capitalization of $500,000.00[2].
[edit] Events
- In 1792, the Bank of New York was the first corporate stock to be traded on the New York Stock Exchange.
- In 1922, the Bank merged with the New York Life Insurance & Trust Company.
- In 1948, the Bank acquired The Fifth Avenue Bank.
- In 1966, the Bank acquired the Empire Trust Company.
- In 1968, the Bank formed its holding company, The Bank of New York Company, Inc.
- In 1988, the Bank of New York acquired the Irving Bank Corporation and moved its headquarters to One Wall Street, now known as the Bank of New York Building.
- In the 1990s, the Bank acquired the National Community Banks in New Jersey and the Putnam Trust Company.
- In 2003, the Bank of New York acquired Pershing LLC [1], a provider of correspondent clearing and outsourcing services for broker dealers, asset managers. and financial intermediaries. That same year, the Bank integrated Lockwood Financial Services [2], Inc. into Pershing, creating one of the largest providers of managed account programs with client assets totaling nearly US$18 billion. The Bank has acquired over 80 other companies in the last 10 years.
- In 2005, the Bank was appointed by Telecom Argentina as trustee, registrar, and paying and transfer agent for its US$1.5 billion) debt restructuring. "The transaction was Argentina's largest corporate debt restructuring to date," according to the Bank of New York November 3, 2005, press release. The restructure involved the exchange of US$2.8 billion in outstanding debt for newly issued exchange notes and cash; "As the settlement agent in the transaction, The Bank of New York received and processed electronic and manual instructions from investors holding bonds in Euroclear, Clearstream, the Depository Trust Corporation (DTC), and from creditors holding debt in physical form." [3]
- In late 2005, the Bank of New York settled with federal regulators for US$38 million regarding a money laundering scandal that began in 1996. The illegal operation involved two Russian emigres—one who was a Vice President of the bank—moving over US$7 billion via hundreds of wires, and ended in the prosecution of at least nine individuals.
- On April 7, 2006, J.P. Morgan Chase & Co. announced they would swap their corporate trust unit for Bank of New York Co.'s retail and small business banking network. The swap values the Bank of New York business at US$3.1 billion, and JPMorgan's trust unit at US$2.8 billion and gives Chase access to 338 additional branches and 700,000 new customers in the New York, New Jersey, and Connecticut Tri-State area.
- In May 2007, Russia has filed a US$22.5 billion lawsuit against the bank for money laundering.[4]
[edit] Merger with Mellon
On December 4, 2006, Bank of New York and Mellon Financial Corporation announced that they would merge, creating the world's largest securities servicing and asset management firm. Under terms of the deal, Bank of New York's shareholders received 0.9434 shares in the new company for each share of Bank of New York that they owned, and Mellon shareholders (Taks) received 1 share in the new company for each Mellon share they owned. Bank of New York and Mellon entered into mutual stock option agreements for 19.9% of the issuer's outstanding common stock.
The new company, called Bank of New York Mellon Corporation, is the world's leading asset servicer by a considerable margin, with $18 trillion in assets under custody (vaulting it over State Street Corporation, which has $15.1 trillion of assets under custody), and corporate trustee with $8 trillion in assets under trusteeship. It ranks among the top 10 global asset managers with more than $1 trillion in assets under management. It also added Mellon's asset management and wealth management businesses to Bank of New York's corporate trust, depositary receipt, correspondent clearing, and government bond clearance activities. This combination of businesses endowed the new company with an extremely diverse business mix and leading positions in most businesses. This seminal move in the history of both parties permitted the merger to recruit some of the most sought after names in the world of securities. The Irish branch in particular secured the signature of Aidan J. Claffey who is said to have revolutionised the workplace, which had previously been dubbed 'absolute cot bugger.'
It ranks as a top-10 U.S. wealth manager with more than $160 billion in client assets, and is a leading U.S. cash management and global payments provider. The company has annual revenues of about $13 billion, and pro-forma market capitalization of about $50 billion. The company has 40 thousand employees around the world. The Bank of New York Mellon Corporation operates in 37 countries, serving more than 100 markets. The company provides financial services for institutions, corporations, and high-net-worth individuals, through a worldwide team. It also services more than $11 trillion in outstanding debt.
Thomas A. Renyi, former chairman and chief executive of Bank of New York, will serve as executive chairman of Bank of New York Mellon for 18 months following the close of the deal, with overall responsibility for the integration of the two companies.
Robert P. Kelly, former president, chairman, and chief executive of Mellon, serves as chief executive of the new company and succeeded Renyi as chairman of the board. Gerald L. Hassell, former president of Bank of New York, holds the same position in the new company.
The board of directors has 10 members designated by Bank of New York, and 8 members designated by Mellon. The new company's headquarters is based in New York City.
The merger was finalized on the July 2, 2007.
