Bank of New York Co. has advanced its plans to beef up its profitable securities processing unit.
This week, the $58 billion-asset bank said it has agreed to buy the corporate trust unit of Signet Bank Corp., Richmond, Va. Terms were not disclosed.
The Signet acquisition would bring 700 bond trustee and agency relationships, most of them for municipalities in Virginia and Maryland.
Signet said in March that it would sell the unit. The deal, expected to close in the third quarter, would be Bank of New York's 16th corporate trust acquisition since 1993. Recent purchases include the corporate trust businesses of NationsBank Corp., Riggs Bank, and Wells Fargo & Co.
Although many banks have left the business-blaming the high costs of maintaining corporate trust units without significant transaction volume-a handful of institutions have built dominant positions.
Bank of New York ranks among the top three contenders in corporate trust, along with Chase Manhattan Corp. and State Street Corp., analysts said.
At the end of 1996, Bank of New York handled 40,000 corporate trust issues worth an estimated $500 billion in principal. Fees from corporate trust grew 105% in 1996, according to the bank.