Bank of New York Co. said it hopes its deal for the corporate trust operations of London-based Coutts & Co. will strengthen its custody business in Europe before the introduction of a single currency next year.
Eleven member countries of the European Union are scheduled to start using a single currency on Jan. 4. The shift is expected to trigger a sharp increase in retail and institutional investments in stocks and bonds, along with more demand for fund management and custody.
"The fundamental change in business practice is a recognition that we have to be more European in our outlook," said Clive Gande, the bank's London-based managing director.
On Monday, Bank of New York announced it would acquire the British unit trust and institutional custody business of Coutts & Co., the private banking unit of National Westminster PLC.
Bank of New York, one of the world's largest providers of securities processing, custody, and funds transfers, has been steadily building up its international activities since it acquired the global custody operations of J.P. Morgan & Co and BankAmerica Corp. several years ago.
More recently it struck a custody alliance with Standard Bank of South Africa, acquired Bank of Montreal's U.K. corporate trust business, and reached an outsourcing agreement with London-based fund manager Gartmore Investment Management.
The Coutts transaction would add a further $15 billion of assets to the $400 billion in European global and master custody assets that Bank of New York manages. The bank processes and holds some $4.2 trillion of assets for clients worldwide.