By Everdeen Mason
Bank of New York Mellon Corp.'s (BK) fourth-quarter profit fell
15% and missed expectations as investment charges offset improved
market conditions and a growth in assets.
Trust banks such as BNY Mellon act as custodians and services
for corporations and Wall Street and earn most of their money
collecting fees for various servicing activities, such as
safekeeping and accounting. They make fewer loans than commercial
banks and therefore invest more of their deposits in securities,
which has hurt earnings in recent years because of low bond
yields.
Through the year, the company reported strength in its core
investment services and investment management fees while benefiting
from improved market conditions, said Chief Executive Gerald
Hassell.
BNY Mellon reported a profit of $539 million, down from $635
million a year earlier. Per-share earnings, which reflect preferred
dividends, fell to 44 cents from 53 cents. The latest period's
results include an after-tax loss of 10 cents a share related to an
equity investment.
Revenue slipped to $3.59 billion from $3.62 billion, and total
fee revenue slid 1.5% to $2.76 billion.
Analysts polled by Thomson Reuters forecast per-share earnings
of 54 cents on revenue of $3.72 billion.
Assets under management jumped 14% from a year earlier to $1.58
trillion as of the end of the quarter, while assets under custody
and administration increased 5% to $27.6 trillion.
Shares closed Thursday at $33.92 and were inactive premarket.
The stock is up 28% in the past 12 months.
Write to Everdeen Mason at everdeen.mason@wsj.com
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