Analyst Cuts View On Trust Banking Sector

NEW YORK (AP) — An analyst on Monday cut his view of the trust banking sector as low interest rates hurt business.

Goldman Sachs Group Inc. analyst Brian Foran also lowered his rating on Bank of New York Mellon Corp. to "Neutral" from "Buy" because of the potential for high credit costs.

Foran maintained a "Buy" rating on Northern Trust Corp. and a "Neutral" rating on State Street Corp.

Shares of the three trust banks slid Monday morning amid a decline in the broader market. Bank of New York Mellon shares fell the furthest, declining 81 cents, or 2.8 percent, to $29.46.

Northern Trust shares fell 44 cents to $58.29, while State Street lost $1.37, or 2.5 percent, to $53.03.

Foran said in a research note that trust banks, which provide banking services for institutional investors, other financial firms and high net worth individuals, will be hurt in the near future by low interest rates. Low rates hurt fees from money market funds and security lending spreads, Foran wrote in the note.