By Chelsey Dulaney And Daniel Huang
Bank of New York Mellon Corp. posted a stronger-than-expected
profit in its first quarter, boosted by higher revenue and lower
expenses.
BNY Mellon, which acts as an investment manager while
safeguarding trillions of dollars for money managers and other
clients, has faced pressure in recent months from investors who
criticized it as slow to change and in need of a retrenchment.
Growth in the bank's assets servicing and management business
helped drive increased fee revenue in the most recent quarter.
BNY Mellon posted a profit of $779 million, up from $674 million
in the prior-year period. On a per-share basis, which excludes
preferred dividends, earnings rose to 67 cents from 57 cents a year
ago. Revenue grew 5.6% to $3.85 billion.
Analysts had projected 59 cents a share in earnings and $3.75
billion in revenue, according to Thomson Reuters.
"Earnings per share growth was driven by higher revenues across
all of our businesses [and] our success in holding our expenses in
check," said Chairman and Chief Executive Gerald Hassell in a
statement.
Fee and other revenue grew 4.1% to $3 billion, amid a 68% surge
in foreign exchange and other trading revenue. Investment services
fees grew 3% to $1.75 billion, while investment management and
performance fees grew 1% to $854 million, both affected negatively
by the effects of a stronger dollar.
Assets under management ballooned to a record $1.74 trillion, a
7% increase from the same period a year ago, lifted by strong
performance in the equity market and the acquisition of
fixed-income shop Cutwater Asset Management in January. Assets
under custody or administration increased 2% to $28.5 trillion.
BNY Mellon said its net interest margin, a measure of lending
profitability, edged down to 0.97% from 1.05% in the same period a
year ago.
Noninterest expense was down 1% from a year earlier to $2.7
billion, amid lower distribution and servicing expenses, business
development costs and amortization charges, and the favorable
impact from a stronger dollar.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com and Daniel
Huang at daniel.huang3@wsj.com
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