Bank of New York Mellon approached Northern last week to express interest in merging with its smaller rival, people familiar with the matter said, in what would be a monster deal for the financial-services industry.

Northern Trust shares surged 8% on the news.

The chief executives of BNY and Northern Trust had at least one conversation, the people said, though the firms didn't discuss a specific offer.

BNY is considering its next steps, which might include returning to Northern Trust with a formal bid. It is possible the talks won't result in a transaction, the people cautioned.

Northern Trust has no interest in pursuing a deal with BNY, a person familiar with the company's plans said.

Any deal would be huge. Chicago-based Northern Trust has a market value north of $21 billion after its share price has risen about 9% year to date.

The Trump administration has signaled more willingness to approve big banking deals, after few have been tried in recent years.

The two firms each have an array of businesses that safeguard, manage and move money for companies, investment firms and financial advisers.

BNY is the world's largest custodian bank, keeping records for pension funds and other institutional investors, and helps manage companies' cash and debt servicing. The bank also settles trades backed by U.S. government debt, and has a large asset- and wealth-management business.

Shares in BNY have surged more than 50% in the past year as a turnaround plan hatched by the bank's chief executive, Robin Vince, has lifted profit and revenue. The stock's rally has pushed the company's market capitalization above $65 billion.

A former executive at Goldman Sachs, Vince has served as BNY's CEO since September 2022. He was appointed chairman earlier this month.

A deal would marry two of the world's largest asset-servicing businesses and create an investment-management powerhouse that oversees more than $3 trillion.

Northern Trust also provides back-office and administrative services to investment firms and, like BNY, has its own money-management division. Its chief executive, Michael O'Grady, is a former dealmaker.