Custody banks

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.