State Street: We Haven't Changed Pricing Practices On Deposits

State Street Corp. (STT) hasn't changed its pricing on customer deposits, a spokeswoman said Thursday.

The statement follows news earlier Thursday that rival custodian Bank of New York Mellon Corp. (BK) told customers it would start charging for some deposits over $50 million, a sharp move as banks see deposits pile in.

The State Street spokeswoman declined to comment further on any customer pricing decisions.

A spokesman for U.S. Bancorp (USB), which has a smaller custodial operation, also said the bank hasn't changed its policy.

Representatives from Northern Trust Corp. (NTRS), Citigroup Inc. (C), and J.P. Morgan Chase & Co. (JPM), which are large custodians, weren't immediately able to comment. Representatives from Bank of America Corp. (BAC), which also has a custody business, and Wells Fargo & Co. (WFC), the nation's second biggest deposit holder after Bank of America, also weren't immediately able to comment Thursday.

Deposits at State Street, which as a custodian deals with large corporate clients and other banks as customers, soared during its second quarter. Deposits as of the end of June were up $18 billion, or 17%, from the end of March, and up more than $27 billion year-to-date. Bank of New York Mellon said it's incurring costs such as deposit insurance on the surge of deposits, but is having difficulty investing the money to earn a return.

With markets in turmoil, and U.S. Treasurys yielding slim amounts, large cash-holders have been parking their cash in banks. BNY Mellon said clients have been seeking a safe-harbor and it was notifying customers with "extraordinarily high" deposits it could charge 0.13% on deposits.

-By David Benoit, Dow Jones Newswires; 212-416-2458; david.benoit@dowjones.com

--Matthias Rieker and Robin Sidel contributed to this article.

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