Bank of New York Mellon said it would cut $650 million in costs over the next three years and be prepared to settle disputes involving its fees for foreign exchange transactions.
The custody bank and asset servicer said it would consolidate some locations, reduce the number of computer applications it uses and bring software development in-house.
The plans, outlined in a conference call Monday by chief executive Gerald Hassell, could result in a $100 million charge against earnings in the next quarter.
Its asset servicing business will absorb the largest portion of the cuts.
BNY Mellon has $25.9 trillion in assets under custody and administration, $1.2 trillion in assets under management, services $11.9 trillion in outstanding debt and processes global payments averaging $1.6 trillion per day.
Hassell defended the bank’s fees and practices in foreign exchange transactions, which it handles on a scale, it has noted, that its individual clients cannot.
BNY Mellon was sued last month by New York Attorney General Eric T. Schneiderman and the U.S. Attorney’s Office in Manhattan for allegedly overcharging clients.
Hassell, on the call, said the accusations were “unfair.” But the firm would be willing to settle the matter on “reasonable terms.”
-- This article first appeared on Securities Technology Monitor.
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