By Logan Moore

Custodian banks State Street Corp. and Bank of New York Mellon Corp. grew assets under management while experiencing low-to-single-digit declines in profit and revenue, the companies reported Friday morning.

Total revenue for BNY Mellon was $3.8 billion for the quarter ended Sept. 30, a decrease of 0.4% compared with the same quarter last year. The bank grew its assets under management by 8.5% to $2 trillion but its profit dropped 9.3% to $944 million.

"I believe the underlying strength of our franchise will become more apparent next year, as we expect to have most of the run-rate impact of lower rates associated with money market fee waivers in our earnings," said Chief Executive Officer Todd Gibbons in a release.

State Street Corp. reported an increase in assets under management of 6.6% in the third-quarter to $3.1 trillion.

Total revenue for State Street fell 4% to $2.8 billion. Profits were down almost 4.8% to $555 million from $583 million.

"Though persistent low rates depressed net interest income during the quarter, deposit levels remain strong, allowing us to lend more to our clients and reinvest in our investment portfolio," said Ron O'Hanley, chairman and chief executive officer, in a release.

Even before the pandemic, custodial banks struggled with low interest rates and their impact on interest-earning assets.

Those rates are likely to remain low for the long term. Last month, the Federal Reserve said it would keep rates near zero until the labor market improves and inflation hits 2%.

Bank of New York Mellon Corp. said it set aside $9 million for credit losses.

(END) Dow Jones Newswires

October 16, 2020 09:08 ET (13:08 GMT)

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