Bank of New York Mellon is open to buying more “tuck-in” technology companies and isn’t ruling out a blockbuster acquisition for assets after rival State Street struck a multibillion-dollar deal last year, Chief Financial Officer Emily Portney said Thursday.
BNY Mellon was busy last year in M&A, buying the fund management technology company Milestone Group and Optimal Asset Management, a software company that helps investors build indexes.
But the activity was overshadowed by State Street’s announcement in September that it was buying Brown Brothers Harriman Investor Services for $3.5 billion. When that deal closes this year, Boston-based State Street will overtake BNY Mellon as the nation’s largest custody bank.
“If you're asking, would we consider making a large acquisition, the answer is yes,” Portney said at the Credit Suisse Financial Services Forum. “With any acquisition, there's a high bar, but with a large transaction, there's a really high bar.”
Portney’s comments marked a slight shift in tone from CEO Todd Gibbons’ comments at another conference last year, when he said that BNY Mellon was largely “focused on organic growth” but would “take into consideration” any acquisition opportunities that came up.
One issue is
Because there are concerns about a potential “culture clash” with any major merger, the company is still leaning toward more “digestible” tech-focused acquisitions, Portney said.
Including acquisitions, BNY Mellon expects to invest about $3.5 billion in technology this year, which would be up from $2.4 billion five years ago, Portney said.
“So needless to say, you'll probably see more of those,” Portney said of potential tech deals. “But that certainly does not preclude larger scale transactions if … it ticks all those other boxes.”
