Three months after becoming Mellon Financial Corp.'s chief executive, Robert P. Kelly made his first organizational change at the Pittsburgh company, a restructuring of its asset servicing business.
The restructuring, announced Tuesday, combined Mellon's global securities services and investment manager solutions units to enhance cross-selling. It did not scream radical departure. If anything, it is a continuation of a makeover initiated by his predecessor, Martin G. McGuinn.
The Pittsburgh company said the changes took effect Monday.
It combined its mutual fund and institutional asset management businesses under a single unit in January, a month before Mr. McGuinn resigned after months of investor pressure to shed either its asset servicing or management units to unlock shareholder value.
A spokesman for Mellon said Mr. Kelly, the former chief financial officer of Wachovia Corp., was unavailable for comment Tuesday, but James P. Palermo, one of the executives promoted in Monday's reorganization, said it shows Mr. Kelly's commitment to both asset servicing and asset management.
"We're very clear to state, and Bob is very clear to state, the emphasis that we have on our asset servicing and asset management businesses … and how we see just tremendous synergies and opportunities for the two groups," he said.
Mr. Palermo, who was the president of Mellon's global securities services and its New England operations, now heads the asset servicing business. He continues to report to senior vice chairman Steven G. Elliott, the company said.
John L. Klinck Jr., who was the president of Mellon's investment manager solutions, assumed a new role - chief operating officer of the asset servicing business. Mr. Klinck is in charge of global operations and product management and design for the business, the company said. He now reports to Mr. Palermo instead of Mr. Elliott.
Mellon, with $4.1 trillion of assets under administration, offers institutional trust and custody services such as securities lending, foreign exchange, investment management back-office outsourcing, performance measurement, and fund administration, among other things, through units that were combined in the asset servicing business.
Monday's reorganization "is all about continuing to emphasize our asset management/asset servicing businesses and to deliver it in the most effective way to the market," Mr. Palermo said in an interview Tuesday.
When Mellon issued its first-quarter earnings report last month, Mr. Kelly said he and his team were conducting a "detailed" appraisal of its strategy and tactics. The company aims to improve performance in all of its business lines. First-quarter revenue from asset servicing rose 29% from a year earlier, to $313 million, or 25% of the company's total.
Mark Fitzgibbon, the director of research at Sandler O'Neill & Partners LP, said the changes improve accountability as the company continues to become more efficient, but they also suggest that Mr. Kelly is supportive of the changes that his predecessor began.
"It's a ratification that the asset servicing is on the right track and under the right leadership," Mr. Fitzgibbon said.
"I think that some people had thought when [Mr. Kelly] came to the company that he would bring in his own people. These announcements would seem to suggest that that's not going to happen."
