The deal would involve JPMorgan handing over its back-office processing unit to Bank of New York in exchange for the 300 branch offices, according to sources close to the matter.
Bank of New York is one of the biggest retail banks in the New York metropolitan area, although for the past decade collecting deposits and giving out loans to consumers has come secondary to its principal business of selling securities services to institutional investors.
Its retail banking arm made $895 million in profits last year, just ten per cent of its overall revenue.
According to analysts, a deal would therefore make sense for both parties because it would bolster JP Morgan's market-leading position in retail banking in New York and its surrounding areas whilst allowing Bank of New York to concentrate on its larger securities processing business.
Spokesmen for both Bank of New York and JP Morgan have declined to comment on the deal, which is believed to be worth around $4 billion.