Bank of New York Mellon Corp sees more acquisition opportunities in Europe than in Asia, the head of the world's largest custodian of financial assets said on Tuesday.

Robert Kelly, the bank's chairman and chief executive, said European financial institutions had been harder hit by the global economic crisis than their counterparts in Asia and were refocusing their businesses as a consequence.

Bank of New York Mellon, which focuses on securities services for institutional clients and asset management, stayed profitable through the financial crisis and remains flush with cash for acquisitions.

Speaking to reporters, Kelly said the bank was in the final stages of obtaining regulatory approval in China for its planned fund management joint venture with Xi'an-based Western Securities, in which it will hold a 49 percent stake, the maximum allowed.

Kelly said BNY Mellon saw China as a long-term investment rather than a short-term money-maker.

The bank was among the first cleared to repay U.S. government bailout funds, returning $3 billion to the Troubled Asset Relief Program (TARP), which allows it to make M&A deals.

(Reporting by Michael Wei and Alan Wheatley; Editing by Ken Wills)