Jones Lang LaSalle
BRANCHING OUT
By RODDY BOYD
March 31, 2006 -- BANK OF NEW YORK MAY EXIT RETAIL BUSINESS
The Bank of New York, under pressure from its board of directors and aggravated shareholders, is considering an asset swap to get rid of its retail branch network, The Post has learned.
The venerable New York bank - founded in 1789 by Alexander Hamilton, who also founded this newspaper - is rumored to be talking to area banking behemoths like Citigroup and J.P. Morgan Chase about a swap, said an individual familiar with the situation.
Bank of New York's stock, which closed at $35.92, up $1.50, lags the performance of both its retail banking competitors like Chase, and securities processing institutions like State Street and Northern Trust.
One investor whose fund owns over 1 million BoNY shares said BoNY's board, which includes entrepreneurial luminaries like Liberty Media's John Malone and Comcast's Brian Roberts, "has seen its stock trade at a sharp discount [to its peers] because they don't have either the management ability or the capital to grow profits in the retail unit."
Under an asset-swap scenario, BoNY's 342-branch retail network - or a major portion of it - is swapped for the securities processing unit of a money center bank.
BoNY would not only pick up a higher-margin, higher-growth business - and shed a lower-margin, slowing-growth one - it would also avoid most taxes with a swap.
If BoNY sells its branch network, which could fetch $4 billion, it would lose $1.6 billion to taxes.
One hedge fund manager, who disclosed he is long BoNY shares, said the most obvious swap candidate is J.P. Morgan, which has hinted that its $1.5 billion a year securities processing unit might be for sale.
"They have 20 percent margins at the [J.P. Morgan] unit and they have no scale. With BoNY's efficiencies, they could double those," the hedge fund manager said.
A BoNY spokesman declined comment; a J.P. Morgan spokeswoman did not return a call.
NEW YORK POST is a registered trademark of NYP Holdings, Inc. NYPOST.COM, NYPOSTONLINE.COM, and NEWYORKPOST.COM are trademarks of NYP Holdings, Inc.
Copyright 2005 NYP Holdings, Inc. All rights reserved.
BRANCHING OUT
By RODDY BOYD
March 31, 2006 -- BANK OF NEW YORK MAY EXIT RETAIL BUSINESS
The Bank of New York, under pressure from its board of directors and aggravated shareholders, is considering an asset swap to get rid of its retail branch network, The Post has learned.
The venerable New York bank - founded in 1789 by Alexander Hamilton, who also founded this newspaper - is rumored to be talking to area banking behemoths like Citigroup and J.P. Morgan Chase about a swap, said an individual familiar with the situation.
Bank of New York's stock, which closed at $35.92, up $1.50, lags the performance of both its retail banking competitors like Chase, and securities processing institutions like State Street and Northern Trust.
One investor whose fund owns over 1 million BoNY shares said BoNY's board, which includes entrepreneurial luminaries like Liberty Media's John Malone and Comcast's Brian Roberts, "has seen its stock trade at a sharp discount [to its peers] because they don't have either the management ability or the capital to grow profits in the retail unit."
Under an asset-swap scenario, BoNY's 342-branch retail network - or a major portion of it - is swapped for the securities processing unit of a money center bank.
BoNY would not only pick up a higher-margin, higher-growth business - and shed a lower-margin, slowing-growth one - it would also avoid most taxes with a swap.
If BoNY sells its branch network, which could fetch $4 billion, it would lose $1.6 billion to taxes.
One hedge fund manager, who disclosed he is long BoNY shares, said the most obvious swap candidate is J.P. Morgan, which has hinted that its $1.5 billion a year securities processing unit might be for sale.
"They have 20 percent margins at the [J.P. Morgan] unit and they have no scale. With BoNY's efficiencies, they could double those," the hedge fund manager said.
A BoNY spokesman declined comment; a J.P. Morgan spokeswoman did not return a call.
NEW YORK POST is a registered trademark of NYP Holdings, Inc. NYPOST.COM, NYPOSTONLINE.COM, and NEWYORKPOST.COM are trademarks of NYP Holdings, Inc.
Copyright 2005 NYP Holdings, Inc. All rights reserved.
posted by Jones Lang LaSalle NJ News Blog at 9:59 AM
<< Home