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BNY Mellon (BK) to Sell Canada Wealth Business to Guardian

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Zacks Equity Research
·4 min read
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The Bank of New York Mellon Corporation’s BK Canada-based wealth management business, BNY Mellon Wealth Management, Advisory Services, Inc. (“WMAS”), is set to be acquired by Guardian Capital Group Limited. Closing of the deal is expected in first-quarter 2021 and is subject to regulatory approvals.

WMAS has been a pioneer in creating the multi-family office and endowment service in Canada.

The acquisition is anticipated to help Guardian expand its current core wealth management capabilities in the ultra-high net worth and family office segment. Moreover, the transaction will likely add $5.5 billion of assets under advisement.

Guardian’s president and CEO, George Mavroudis, stated, “We are excited to have WMAS join Guardian. WMAS is a quality organization that complements our approach and values. Our heritage of working with ultra-high net worth families, and the consistency of our approach and principles will pave the way forward together. We continue to look for ways to enhance our offering to this underserved market segment, and this transaction underscores our growth strategy.”

The CEO of BNY Mellon Wealth Management, Catherine Keating, said, “We believe Guardian Capital will be a great steward to help invest and grow the WMAS business. WMAS’s leadership in investment advice and OCIO services supported by Guardian’s 60 year track record in asset and wealth management are a compelling combination for our Canadian clients and colleagues.”

Notably, through its Investment and Wealth Management segment (which constitutes more than 22% total revenue), BNY Mellon provides investment management services to institutional and retail investors; and investment management, wealth and estate planning and private banking solutions to high-net-worth individuals and families as well as foundations and endowments.

Through its Investment Services segment (constituting more than 70% of total revenues), the company provides global custody and related services, broker-dealer services, alternative investment services, corporate trust, depositary receipt, and shareowner services as well as clearing services and global payment/working capital solutions to global financial institutions.

BNY Mellon’s global diversification efforts, its solid assets under management (“AUM”) balance and prudent expense-management initiatives are expected to keep supporting financials in the quarters ahead. However, the company’s margins are expected to remain under pressure in the near term due to continued low interest rates.

Shares of BNY Mellon have gained 4.7% in the past six months compared with 16.5% growth recorded by the industry.






Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In fourth-quarter 2020, several banks, including many big banks, entered into acquisition deals, thereby, bolstering their growth prospects after facing a slowdown for most of 2020 due to the pandemic.

Recently, Huntington Bancshares HBAN entered an all-stock acquisition deal with Detroit-based TCF Financial TCF, per which both will merge. Upon completion, the combined entity, with market valuation of $22 billion, will be listed as one of the top 10 U.S. regional banks along with ranking fifth in approximately 70% of deposit markets.

Also, Truist Financial’s TFC indirect subsidiary, Truist Insurance Holdings, recently acquired Wellington Risk Holdings, Inc.

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Huntington Bancshares Incorporated (HBAN) : Free Stock Analysis Report
 
The Bank of New York Mellon Corporation (BK) : Free Stock Analysis Report
 
TCF Financial Corporation (TCF) : Free Stock Analysis Report
 
Truist Financial Corporation (TFC) : Free Stock Analysis Report
 
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