The transaction, which was first announced in April, will strengthen BoNYÆs position in the corporate trust world in the US and internationally, servicing a combined client base with $8 trillion in total debt outstanding in 20 countries. In Asia, BoNY picks up five new regional offices in Japan, South Korea, the Philippines, Taiwan and Hong Kong. The new offices will complement its existing corporate trust business in Singapore. In other parts of the world, BoNY picks up seven new offices in Europe and three in Latin America.
Under the acquisition, BoNY enhances its ability to capitalise on the faster growing international and structured finance debt markets, as well as expanding its reputation in the municipal and corporate debt markets. This will mean that BoNY can service most bond issuance needs in the region, including securitisations, vanilla bonds and structured products.
Inevitably, BoNYÆs purchase of JPMorganÆs trust business will come with challenges. Most clients will automatically switch over to BoNY from JPMorgan, but the bank concedes that when new issuance occurs, a greater challenge will emerge.
Prior to the completion of the sale, several members of JPMorganÆs corporate trust team jumped ship. Mark Wiggin, formally vice president for Asian global debt and worldwide securities services, and Paul Roffey, JPMorganÆs head of trust company sales for Asia and Australia, crossed to Deutsche Bank to start new positions in its trust and securities service business. There are also rumours that other members of JPMorganÆs corporate trust team in Asia have gone to other banks.
From JPMorganÆs end, the sale of the trust business will allow its treasury and securities services to focus on custody and associated businesses, cash and trade and investment banking lines like depository receipts and equity capital markets.
Announced in April, the deal will also see BoNYÆs retail banking and middle-market businesses go to JPMorgan, which consists of 338 branches in the tri-state region. This network serves approximately 700,000 consumer households and small businesses with $14.5 billion in deposits and $15.4 billion in assets. Also included in the deal were BoNYÆs regional middle-market businesses that provide financing, banking and treasury services for middle market clients, serving more than 2,000 clients in the tri-state region.