The world’s top custodian banks The Bank of New York Mellon Corp (BNY Mellon) and State Street Corp. (State Street) will each open an office in Jeonju, a southern Korean city where country’s biggest institutional investor National Pension Service (NPS) is headquartered.

Charles W. Scharf, CEO of BNY Mellon and David Cruikshank, BNY Mellon`s Asia Pacific chairman will visit NPS headquarters in Jeonju, Korea on Jan. 24 to sign an agreement to open the bank’s new office in the regional city, according to NPS on Wednesday. The custodian bank plans to open the Jeonju office in March.

It is also reported that State Street is readying to open an office in Jeonju in March. It already has running a temporary office since Monday, according to sources.

BNY Mellon and State Street are world’s no. 1 and no. 2 custodian banks that specialize in safeguarding financial assets for clients such as mutual funds, public pension funds. A custodian bank’s service ranges from safekeeping assets like stocks and bonds to arranging sales of securities and maintaining bank accounts for institutional investors worldwide. BNY Mellon and State Street have $34.5 trillion and $33 trillion, respectively, under custody and/or administration.

It would become the first time for a global bank with a worldwide network in 100 countries to open an office in areas outside of Seoul in Korea. Both BNY Mellon and State Street already have an office in the Korean capital.

NPS, the world’s third largest pension fund with $570 billion in assets under management, hopes the two global custodian banks’ new offices in Jeonju to help it tap deeper into new asset classes and other parts of the globe.

With a goal to raise its overseas allocation to 40 percent of total assets in four years from the current 29 percent, NPS in September re-appointed State Street as the back-office service provider for its global equity portfolio and awarded it with the first-ever middle-office mandate for the pension fund, according to State Street. BNY Mellon was also named as custodian to safeguard its fixed income investment worldwide.

State Street has been providing custody, fund accounting, performance and analytics, mandate compliance and securities lending services to NPS’s global equity portfolio since 2013, and under the renewed contract, it will serve the pension fund for a further three years.

By Yoo Joon-ho and Cho Jeehyun

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