Bank of New York Pushing Trust, Custodian Services
Following the lead of other money-center banks, Bank of New York is aggressively marketing its technology-intensive master trust and custodian services.
The New York-based bank announced last week that it had signed a contract with Fairfax County, Va., for a $925 million custody relationship.
The lead bank of $41.1 billion-asset Bank of New York Co. has some $800 billion in custody, of which $27 billion is in investment holdings outside the United States.
The bank is one of the largest providers of these services for public funds. State Street Boston Corp. and Northern Trust Corp., Chicago, also are top providers.
And in the mutual funds arena, the bank signed two large deals in the past month: one with Dean Witter Mutual Funds to act as custodian for $43 billion in assets, and one with Fidelity Mutual Funds to handle $28 billion in assets.
Traditionally close-mouthed about its activities, Bank of New York seems to be opening up.
"We turned our attention inward to get the consolidation [with the 1988 acquisition of Irving Trust Co.] done with as little disruption as possible," said Thomas J. Perna, executive vice president and head of the bank's securities processing sector. "The real thrust has been to get the back-office processing systems in place, to make them low-cost and accurate."
The bank now hopes to increase its trust business, which demands multimillion-dollar technology investments to stay competitive. "Now that the systems are in place and the marketing staff has been out calling, we're ready to turn our attention outward," Mr. Perna said.
Fairfax County will use Bank of New York services for its three retirement funds, including a supplemental pension plan and a fund for police officers.
"We picked the Bank of New York because we were impressed with its accounting report capabilities, especially their amortization methods, and the flexibility of the bank's technology," said Jeanne M. Carr, executive director of Fairfax County's retirement administration agency, in a prepared statement.
Bank of New York will perform consolidated reporting, including reporting of all the securities held across a single portfolio, showing, for example, all investments made in the automobile industry.
The bank also will feed raw data so the client can develop reports internally.
In addition to providing custody service, Bank of New York will measure the performance of Fairfax County's funds against other portfolios.