Bank of Boston Corp. and State Street Boston Corp. plan to set up a joint venture to handle their stock transfer operations.
The plan marks another step in consolidation among players in the trust and securities processing business.
Bank of Boston said the joint venture, to be known as BancBoston State Street Investor Services, will be the third-largest stock transfer agent in the United States, with more than 10.5 million shareholders and 1,000 corporate clients.
Stock transfer agents keep records of shareholders in publicly traded companies. They also provide a range of investment-related services such as dividend payments, dividend reinvestment, direct stock purchase plan administration, proxy mailing, stock option services, and distribution of interim reports.
Bank of Boston and Boston Financial Data Services, a joint venture of State Street and DST Systems Inc., will each own 50% of the new entity.
In a separate but related transaction, Bank of Boston said it had agreed to sell its $60 billion corporate trust business to State Street for an undisclosed sum.
Analysts estimated the deal was worth between $25 million and $30 million.
Ira Stepanian, chairman of Bank of Boston, said that over the past 18 months, beginning with the divestiture of a factoring business, "Bank of Boston has exited a number of nonstrategic businesses where we felt we could not hold a strategically significant position without committing additional resources disproportionate to the return we could expect."
The banks' corporate trust division services more than $60 billion of bond issuances, and acts as a trustee, escrow agent, registrar, and paying agency. It also ensures that bond issuers comply with their obligations.
Both the joint venture and the sale are expected to close this year.