BNY Mellon Sees $80 Million to $100 Million Cost on Severance

May 20, 2014 9:44 am ET

May 20 (Bloomberg) ---- Bank of New York Mellon Corp., the world’s largest custody bank, said today it will take an $80 million to $100 million severance charge in the second quarter for unspecified cuts to its workforce.

The New York-based bank said “rationalizing our staffing,” would save $100 million on an annual basis, according to a slide presentation BNY Mellon released for an investor conference. BNY Mellon also confirmed that it was exploring a sale of its corporate trust business, which Bloomberg News reported in April.

Like other custody banks, BNY Mellon has been under pressure to cut costs as low interest rates have cut income from its investment portfolio, held down revenue from securities lending and forced it to waive fees on money-market funds. The bank is pursuing a sale of its headquarters at 1 Wall Street, and expects to reduce its office space in New York by 700,000 square feet.

Kevin Heine, a bank spokesman, declined to provide details of the staff cuts. BNY Mellon shares fell 0.3 percent to $33.99 today in New York trading, bringing the decline this year to 2.7 percent.