Allied Irish Bank and the Bank of New York are forming a new Irish joint venture in Dublin for the domestic Irish and global custody and trustee business. The new joint venture company, AIB/BNY Trust Company, is assuming the custody and trustee services already delivered by AIB and builds on an earlier venture between the two banks.
AIB has built a significant custody and trustee business in Ireland with assets under custody of E75bn. Mark Kerns, senior vice president at Bank of New York, says the new company will offer master custody and other additional services including performance measurement, risk management and securities lending. “The idea is to have an end-to-end solution for mutual funds and to build the institutional market in Ireland,” he says.
Part of the bank’s strategy in the past 10 years has been to offer institutional clients as many services as possible and Kerns believes the current trend to outsource mid and back office activities stands them in good stead. The issue of pan European pensions is key to the group. “We’d expect to see more organisations looking at pan-European funds and this will lead to growing demand for consistent reporting.”
Another reason is to capitalise on the continuing growth in the local market. “From an Irish point of view, the government has done a tremendous job in promoting Ireland as a fund management centre. If you look at the growth in mutual funds it is going to continue and the insurance companies and pension funds are extremely important as well,” he says.
In 1994 Bank of New York saw an increased demand for offshore fund administration services and joined forces with Allied Irish Bank, at the time a fund administration and securities services provider, to produce AIB/BNY Fund Management.
AIB and the Bank of New York’s previous venture has proved successful and the fund administration side now employs 200 staff in Dublin’s International Finance Services Centre. According to the latest Fitzrovia figures, investments under administration grew to $54.6bn making it the country’s largest provider ahead of Deutsche International on $52bn.
Colm Doherty, managing director of AIB Capital Markets in Dublin, said: “Our existing joint venture in fund administration has yielded six years of rapid and capital growth… It make sense for us to enhance further our services by extending our relationship with the Bank of New York whose global capabilities will complement and considerably expand our offerings.”
Bank of New York has a similar venture in South Africa with Standard Bank.

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