By the Division of Banks

DECISION
RELATIVE TO THE PETITION OF
POWER CORPORATION OF CANADA AND POWER FINANCIAL CORPORATION, MONTREAL, QUEBEC, CANADA
TO ACQUIRE PUTNAM FIDUCIARY TRUST COMPANY, BOSTON, MASSACHUSETTS, AN INDIRECT SUBSIDIARY OF PUTNAM INVESTMENTS TRUST, BOSTON, MASSACHUSETTS


Power Corporation of Canada and Power Financial Corporation (collectively "Power" or the "Petitioner"), both of Montreal, Quebec, Canada, have petitioned the Board of Bank Incorporation (the "Board") pursuant to Massachusetts General Laws chapter 167A, sections 2 and 4 to acquire Putnam Fiduciary Trust Company ("PFTC"), Boston, Massachusetts, a Massachusetts-chartered trust company and indirect subsidiary of Putnam Investments Trust ("Putnam"). The transaction is structured so that Great-West Lifeco, Inc, ("Great-West") Winnipeg, Manitoba, Canada, which is controlled by the Petitioner, will acquire 100% of the equity interests of Putnam through indirect wholly-owned subsidiaries organized to facilitate the transaction. The Petitioner currently owns a Canadian trust company that is a "banking institution" for purposes of G.L. c. 167A, sections 2 and 4, thus requiring the Board's approval for Power Corporation of Canada and Power Financial Corporation to become bank holding companies.

As directed by the Board, notice of the application was published and posted and a public hearing was held, thereby affording an opportunity for interested parties to attend or submit comments. Other standard procedures informing the public of this matter before the Board were implemented. The public hearing was held on May 16, 2007. Representatives of the Petitioner and Putnam offered testimony and responded to questions from the members of the Board. The public comment period closed on May 18, 2007.

The Petitioner and Great-West are Canadian publicly-owned companies, the shares of which are traded on the Toronto Stock Exchange. Power Corporation of Canada is a diversified international management and holding company with interests in companies that are active in the financial services, communications and other business sectors. Power Corporation of Canada controls Power Financial Corporation, a holding company with substantial interests in the financial services industry. Power Financial, in turn, controls Great-West, a financial services holding company with interests in the life insurance, health insurance, retirement, savings, and reinsurance businesses. Great-West has operations in Canada, United States, and Europe. Great-West and its companies have more than $210 billion in assets under administration.

Marsh & McLennan Companies, Inc. is the parent company of Putnam. PFTC, a Massachusetts-chartered trust company, is an indirect subsidiary of Putnam. PFTC maintains a sole office at One Post Office Square, Boston, Massachusetts. Its primary business is providing investment and trust services to institutions throughout the United States. As of December 31, 2006, PFTC had total assets of approximately $184 million. PFTC engages in trust and investment management activities. It accepts no deposits from the public and makes no loans but maintains deposit accounts of two affiliates in the aggregate amount of $500,000 which allows it to be FDIC insured. PFTC has three ongoing business lines that will continue after the consummation of this transaction and one business line that is being discontinued under an agreement entered into by Putnam prior to negotiations with the Petitioner. One line of business involves PFTC serving as transfer agent for the Putman family of over 100 open-end and closed-end funds which have approximately $124 billion in total assets and an aggregate of more than 9 million shareholder accounts. In addition, PFTC also provides non-discretionary trustee or administrative services for 401(k), 403(b), IRA and other retirement and education savings plans, as well as administrative services for the CollegeAdvantage qualified tuition program. The third line of business is the provision of investment management services for institutional clients, primarily through commingled funds maintained by PFTC for qualified defined benefit and defined contribution plans. These plans had approximately $8.9 billion in assets under management as of December 31, 2006. Prior to 2007, PFTC also served as custodian to the Putnam Funds, providing safekeeping of assets through a number of sub-custodians. This custodial function of PFTC was discontinued as of January 1, 2007.

Prior to approving an application under chapter 167A, the Board must have received notice from the Massachusetts Housing Partnership Fund (the "MHPF") that satisfactory arrangements have been made by the Petitioner consistent with statute and MHPF's various affordable housing loan programs. The Board has recently received notice that satisfactory arrangements had been made by the Petitioner with the MHPF.

The Board's review of this transaction focuses on the applicable statutory and administrative criteria which include, among other things, whether competition among banking institutions will be unreasonably affected and whether public convenience and advantage will be promoted. In determining whether the public convenience and advantage are promoted by the proposed transaction, the Board considers, among other things, whether there has been a showing of "net new benefits." Net new benefits are defined as initial capital investments, job creation plans, consumer and business services, commitment to maintain and open branch offices within a bank's delineated local community, and such other matters as the Board may deem necessary or advisable. The Board also considers the record of performance of the banks involved in this transaction under the Community Reinvestment Act ("CRA") and any relevant public testimony or commentary submitted into the record.

On the issue of whether banking competition will be unreasonably affected by the proposed transaction, the Board considers, but does not rely exclusively on, the guidelines used by federal authorities to review bank mergers. In this transaction, the Petitioner does not engage, directly or indirectly, in any banking activities in Massachusetts. PFTC will continue to engage in trust and investment management activities after the acquisition. Petitioner, commenting on the numerous other companies in the market that provide trust and investment services, provided a listing of nineteen other financial institutions located in Boston that also provide trust and investment management activities. The Board finds that banking competition will not be unreasonably affected by the proposed transaction.

Petitioner submitted information relating to the public convenience and advantage that will result from the proposed transaction. As a general matter, the Petitioner states that PFTC will continue to engage in trust and investment management activities following the acquisition and PFTC will benefit from the longstanding and substantial financial services management expertise of Great-West and its affiliates, which are strong, well-capitalized companies. With respect to net new benefits, the purchase of Putnam by Great-West is intended to expand the presence of the Great-West financial services group in Massachusetts and the United States through the acquisition of Putnam, a strong, well-established investment manager with a broad distribution network. The transaction will result in customers of PFTC becoming part of a larger, well-capitalized consolidated organization with longstanding and substantial asset management expertise. The Petitioner stated it has no current plans for changes in the board of directors or senior executive officers of PFTC or Putnam. Petitioner also stated that it should be noted that there may be a small reduction in the overall employment of Putnam in the near term following the transaction, estimated to represent less than 5% of Putnam's overall workforce, however, Great-West's long term focus will be directed toward growing the business of Putnam. Petitioner expects Putnam to be significantly larger within five years. The expertise and resources of the consolidated organization may facilitate the provision of additional services and benefits to customers of PFTC. Furthermore, the products and services of Putnam and PFTC may be made available through certain of the distribution channels of Great-West and its affiliates, and certain products of Great-West and its affiliates may be made available through the distribution network of Putnam and PFTC. This may enable Putnam and PFTC to allocate their distribution costs across a greater number of products.

Based on the foregoing, and on the entire record of this matter, the Board finds that the public convenience and advantage will be promoted by the proposed transaction, and that the criteria for net new benefits has been established.

The Board's review of this transaction includes an assessment of the subsidiary banks' performance under the Community Reinvestment Act ("CRA"). Such assessment for a state-chartered bank includes examination by Division of Bank personnel, as well as an analysis of the legitimate concerns raised by the community and the bank's response to those concerns. For other institutions, the Board reviews the descriptive rating and evaluation by the applicable federal or state bank regulatory agency. Here, the relevant evaluations were submitted as part of Petitioner's application materials. PFTC received an overall "Outstanding" rating from the Division of Banks in its most recent CRA Performance Evaluation.

Petitioner's application requested a waiver, in light of the nature of the business of PFTC, of the two year asset retention statutory requirement set forth within G.L. c. 167A, §4. The Commissioner has informed the Board that his office will grant the requested waiver separately.

Conclusion

Based on the record of this matter and considered in light of all relevant statutory and administrative requirements, the Board concludes that competition among banking institutions in the Commonwealth will not be unreasonably affected and that the transaction will promote the public convenience and advantage. The Board also finds that the bank involved in this transaction has a satisfactory record of performance under CRA and that the transaction meets all other requirements of Massachusetts law. In accordance with these findings and pursuant to the statutory authority cited herein, the Board approves the application and authorizes Power Corporation of Canada and Power Financial Corporation to become bank holding companies under Massachusetts law and acquire 100% of the stock of Putnam Fiduciary Trust Company, an indirect subsidiary of Putnam Investments Trust.

The approval granted herein is subject to the condition that the transaction is completed within one year of the date of this Decision.

June 27, 2007
______________________
Date

Board of Bank
Incorporation

Steven L. Antonakes
______________________
Commissioner of Banks


Alan L. LeBovidge
______________________
Commissioner of Revenue


Timothy P. Cahill
______________________
Treasurer and Receiver-General