BNY Mellon Assets Fall, Hurt by Outflows and Strong Dollar
20 January 2017 - 12:09AM
Dow Jones News
By Austen Hufford
Bank of New York Mellon Corp. said outflows and exchange rates
pushed down assets under management during its latest quarter on a
sequential basis, even as higher interest rates helped bolster
year-over-year profit.
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 fall during the period due
to outflows, unfavorable exchange rates and market performance.
Assets under management stood at $1.65 trillion at the end of the
quarter compared with $1.72 trillion at the end of the prior
quarter, but up from $1.63 trillion last year.
The stronger U.S. dollar, primarily compared with the British
pound, hurt results.
The company reported $11 billion in net long-term outflows
during the quarter, primarily from actively managed strategies.
Expenses fell 2.3% as the stronger U.S. dollar also helped
decrease staff and severance expenses.
Fee revenue, which makes up nearly 80% of the bank's total
revenue, grew 0.1% from a year prior as investment services fees
increased on higher money market fees. Investment management and
performance fees decreased due to the stronger dollar and lower
performance fees.
Net interest revenue grew 8.9% on the increase in interest rates
and interest-rate hedging.
In December the Federal Reserve approved its second rate
increase in a decade and signaled that interest rates would rise at
a faster pace than previously projected.
The bank's net interest margin, a key measure of lending
profitability, grew to 1.17% from 1.06% in the third quarter and
0.99% in the prior year.
For the quarter, BNY Mellon reported a profit of $870 million,
up from $693 million a year prior. Per-share earnings rose to 77
cents from 57 cents.
Total revenue increased 1.7% to $3.79 billion. Analysts polled
by Thomson Reuters predicted 77 cents in adjusted earnings per
share on $3.85 billion in revenue.
Late last year, the bank was unable to process client payment
instructions sent over the Swift network for several hours in a
rare outage that caused some payments to fail.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
January 19, 2017 07:54 ET (12:54 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Bank of New York Mellon (NYSE:BK)
Historical Stock Chart
From Apr 2024 to May 2024
Bank of New York Mellon (NYSE:BK)
Historical Stock Chart
From May 2023 to May 2024