Robert P. Kelly, Mellon Financial Corp.'s chief executive officer, said Monday that the Pittsburgh banking company plans to launch a branding strategy next year that will include consolidating into a single retail brand.
The company has three retail brands globally - Dreyfus in the United States, Newton in the United Kingdom, and Mellon Asset Management globally. It wants to move to "one retail brand, Mellon," in order to simplify things, Mr. Kelly said during Mellon's annual investor conference in New York City.
On the institutional side, he said, the company wants to shift to a "power brand concept" in which the Mellon brand and subsidiaries' brands and names are more closely linked on letterhead and business cards.
"We have a lot of brands," he said, "and we are very comfortable with our institutional strategy of having many boutiques, but there are a lot of very different looks and feels to these brands."
"We want to simplify the look and feel," he added.
Ronald P. O'Hanley, a Mellon vice chairman and the president of Mellon Asset Management, said that the Dreyfus and Newton brands will not go away but that "Mellon" will become more visible.
Mr. Kelly said, "We want to spend more money on branding over time, but we want to be rational and thorough. Dreyfus is a valuable brand, but we will try to transition over time … to insure that people know that they are part of the Mellon family."
Analysts had predicted that Mellon would keep at least two retail brands, one for sales inside the United States and one for global sales. Mark T. Fitzgibbon, an analyst at Sandler O'Neill & Partners, said in an interview in September that Mellon had been bringing together its retail functions during the preceding 12 to 18 months.
The multiboutique model is "at the heart" of everything that Mellon has accomplished, Mr. O'Hanley said, and he expects the company to continue leveraging this approach for international growth.
Mellon, which had $918 billion of assets under management at Sept. 30, has made three overseas moves in the past seven months. In April, it started West LB Mellon Asset Management, a joint venture with the German asset manager WestLB AG, to increase its presence in Germany and France. And in October it bought Walter Scott & Partners Ltd., a Scottish equity investment firm with $27 billion of assets under management. It also opened a Beijing office in June.
Mr. Kelly said the company has seen significant growth internationally. In 2000, he said, 5% of Mellon's pretax income came from outside the United States. In the first nine months of this year, 17% of earnings have come from abroad, and 24.7% of its 19,000 employees work outside the country.
A good portion of Mellon's growth will come from outside the United States, he said, and he expects more than 25% of pretax income in 2008 will come from abroad.
"Europe will be a big engine for growth for us over the next five years," he said, "and we are making investments in Asia that will pay off over the next decade."
Mr. O'Hanley said that, despite international success, the company must work hard to improve its domestic results. "This is really a tale of two cities," he said. "We have had strong growth institutionally and internationally, but we have not had the same growth in retail and intermediary."
