Custody banks

The custody bank reported a strong fourth quarter, as it continued to push forward with its new operating model. The momentum contributed to the bank's decision to lay out new financial targets, including a goal to achieve a return on tangible common equity of 28% in the next three to five years.

TradFi companies are making strategic investments in infrastructure to support the growth of tokenized assets

The Bank of New York Mellon had 117 different AI solutions in production at the end of September, Chairman and CEO Robin Vince said. That's up 75% from the second quarter.

More nonbank digital asset firms are applying for national trust charters, a development that many banking organizations oppose due to what they say is inadequate oversight, lack of congressional intent and no FDIC backstop.

Federal banking regulators outlined considerations for safely handling digital assets in a new guidance published Monday, which replaces prior statements on crypto that were withdrawn earlier this year.

The investment and custody bank beat Wall Street estimates on net income but missed on revenue expectations. An increase in fee revenue offset stagnant net interest income. Management expects more of the same for the rest of the year.

CEO Ron O'Hanley touted an "encouraging financial performance" at the $326 billion-asset custody giant due to asset inflows and a jump in income from securities and loans.

The New York-based company saw assets under custody and management jump, driving strong increases in both fees and overall revenues for the quarter ending June 30.

In correspondence with Rep. Andy Barr, R-Ky., the Federal Reserve and Office of the Comptroller of the Currency said the Securities and Exchange Commission's proposed safeguarding rule could change banks' custody businesses.

After seeing deposit increase over the second half of March, CFO Dermot McDonogh restated the New York custody giant's guidance for a 20% year-over-year jump in spread income, hinting the company might actually overshoot its target.

The custody giant benefited from rising interest rates, which helped offset choppy financial markets and a decline in fee income.

Chief Financial Officer Emily Portney said Bank of New York Mellon would be interested in buying more custody assets if an opportunity arises and the price is right. In the meantime, it continues to eye deals for small tech companies.

The trust bank and the credit card company said they'll make it easier for customers to use cryptocurrencies. The announcements contributed to another jump in the price of the largest digital asset.

Bank of New York Mellon, State Street and Northern Trust have even more reason to slash costs than commercial banks because their options to boost revenue are more limited. Problem is, they also have fewer cost-cutting options.

U.S. Bancorp says its agreement to buy a portfolio with $320 billion of assets under management will raise its profile on the West Coast. The MUFG unit plans to reinvest proceeds from the sale in other priorities.

They're among a handful of companies willing to hold clients' digital assets for safekeeping. Many of their peers balk at the reputational and financial risks.

The Boston-based firm has been informally working with an adviser to review strategic alternatives for State Street Global Advisors, including a merger with a competitor, people familiar with the matter said.

In July, the OCC issued a letter clarifying that federally chartered banks can store cryptocurrency assets for their clients. A recent global survey finds that many are wary of the risks.

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Citigroup’s $900 million payment blunder in a normally low-profile part of the financial market dominated by a handful of banks has experts wondering if regulators will uncover a deeper problem.