Bank of New York Mellon Earnings Rise on Lower Expenses
October 20 2016 - 8:10AM
Dow Jones News
Bank of New York Mellon Corp. said profit and revenue increased
in its latest quarter because of lower expenses and higher assets
under management.
As a custody bank, BNY Mellon derives much of its business from
serving trillions in assets for money managers and other clients,
in addition to managing clients' investments.
The bank saw assets under management increase during the period.
Assets under management stood at $1.72 trillion at the end of the
quarter, up 5.5% from a year earlier and 3.1% from the second
quarter.
The increase in assets under management from a year earlier was
due to a positive net market impact that was partially offset by
currency rates, the bank said.
The company reported $1 billion in net long-term inflows during
the quarter, hurt by index investments which were offset by
strength in actively-managed strategies.
Expenses fell 1.4% as the stronger U.S. dollar helped decrease
expenses across the board and lower software, equipment, legal,
occupancy and business development costs.
Fee revenue, which makes up about 80% of the bank's total
revenue, grew 3.2% from a year prior. Investment services fees
increased on higher money market fees, depositary receipts and
increased securities lending revenue as investment management and
performance fees increased due to higher market values and money
market fees. Foreign exchange revenue decreased due to lower
volumes and volatility, partially offset by currency hedging.
Net interest revenue grew 2% from a year earlier because of what
the company said are actions to reduce the levels of our lower
yielding interest-earning assets and higher yielding
interest-bearing deposits. The move also reflects higher market
interest rates.
The bank's net interest margin, a key measure of lending
profitability, grew to 1.06% from 0.98% in the second quarter.
For the quarter, BNY Mellon reported a profit of $987 million,
up from $833 million a year prior. Per-share earnings rose to 90
cents from 74 cents.
Total revenue increased 4% to $3.94 billion. Analysts polled by
Thomson Reuters predicted 81 cents in adjusted earnings per share
on $3.86 billion in revenue.
In September, BNY Mellon said that President Karen Peetz would
retire at the end of the year.
Shares in the company, up 1.1% in the past three months, were
inactive premarket.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
October 20, 2016 07:55 ET (11:55 GMT)
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