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Bank of New York Mellon: The silent giant in Belgium

It does not deal with the wider public and operates in a discrete fashion. Nonetheless, when looking at its balance sheet, the Bank of New York Mellon (BNY Mellon) ranks as the fifth biggest bank in Belgium. Its clients: other Belgian banks, pension funds and insurers.

BNY Mellon – whose history goes back to 1784 – is not a bank in the classic sense of the word. The American giant is mostly active as a service provider and asset manager for the financial sector. Managing over €1,000bn, it is an important player in that segment.

For years now, Brussels has been the most important entity of BNY Mellon outside the US. Historical reasons explain the Brussels’ roots of the American group, with BNY Mellon taking over the custody-bank of JP Morgan in 1995. Since then, the bank has reconfirmed its choice of Brussels as its European base. “When we had to regroup our activities, we had to choose between London and Brussels,” explains Paul Bodart, CEO of BNY Mellon Brussels. “In the end, Brussels made it. Here, we don’t compete with investment banks to attract solid financial profiles. Brussels is a paradise in terms of languages that meets our needs: out of 800 employees, we count 49 nationalities and 27 languages.” These same reasons explain the presence of companies such as payment specialist SWIFT, settlement group Euroclear or Mastercard in Belgium, and make Belgium a significant financial center.

Over the last years, the Brussels entity gained more importance when the parent company merged a number of other European entities, such as BNY Mellon Germany, with the one in Brussels. Thanks to the mergers, the BNY Mellon Brussels workforce increased to 1,500 employees (out of 48,000 employees worldwide), of which approximately 800 are physically based in Brussels, while the rest is spread out over Frankfurt, Amsterdam, London or Luxembourg.

By 2013, BNY Mellon plans to also merge with the Luxembourg and The Netherlands entities, as fewer entities mean fewer capital buffers and reporting requirements. “We would like to continue with our plans, but the government’s new bank levy will increase the tax burden on Belgian branches of foreign banks, which is an additional obstacle on our path to more growth,” says Jean-Christophe Mathonet, CFO of BNY Mellon Brussels. “This obstacle could potentially weaken the position of Brussels entity in the long run, which would not be to the benefit for Brussels as a financial center. Importantly, the Belgian tax payer assumes no risk because we are not a classic deposit bank.” However, Paul Bodart believes a solution can be found. “I am optimistic by nature and I rather work towards a solution than ponder on what will happen if none is found. I believe there is a common sense in Belgium and I hope it will triumph.”

AmCham Belgium’s position

AmCham Belgium welcomes the initiatives of BNY Mellon to continue deepen its Brussels roots, as it brings more high-value added jobs to Belgium. We also support BNY Mellon in urging the Belgian government to continue its commitment to creating an enterprise-friendly business environment, accompanied by a sustainable tax regime. See our 2012 Priorities for a Prosperous Belgium, in which we stress the general need for stability and growth within the Belgian business environment, as well as for making the Belgian labor market more competitive.