Bank of New York Co. Inc., which five months ago divested its retail and middle-market banking business to JPMorgan Chase & Co., has no plan to sell its private banking or asset management businesses, according to its chairman and chief executive officer.
Thomas A. Renyi said it has "reorganized its priorities" in the past couple of years to focus on security servicing and asset management. Though private banking and asset management collectively make up only 8% of the company's pretax income, he said, they remain part of its strategy.
"Long term, [asset management and private banking] are integral to our product offering," he said. "They are a natural cross-sell for our other lines of business."
In April, Bank of New York said it would swap its retail and middle-market banking business for JPMorgan Chase's corporate trust business and $150 million of cash. The swap, which is expected to close this quarter, would divest Bank of New York's 338 branches.
Mr. Renyi told the Lehman Brothers Financial Services Conference on Wednesday that Bank of New York has "shifted its business mix away from slower-growing, capital-intensive, traditional banking businesses" but that his company plans to cross-sell its asset management and private banking capabilities to institutional and high-net-worth customers.
"We remain focused on our asset management and our alpha-generating products," he said. He added that he hopes Bank of New York can work with its Ivy Asset Management unit to keep developing alternative products.
Bank of New York's private banking capabilities are relatively small, Mr. Renyi said, but maintaining its longstanding presence in the New York City market can enable it to grow. "Affluent clients have a great interest and appetite for the asset management products that we offer," he said. " … Super-high-net-worth individuals are looking for the same level of products and service that we are offering to our institutional clients."
Mr. Renyi said the bank quit the slower-growth retail business in order to reinvest in securities servicing and asset management. It has replaced half of its earnings since 1995, he said, and increased its assets under custody from $2.3 trillion to $12 trillion.
"These businesses are what we do best," he said, "and [they] have better prospects for growth than any business we have ever had."
