Bank of New York Mellon Beats Earnings Estimates

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The Bank of New York Mellon Corporation (NYSE:BK) released the earnings results from its third quarter before closing bell this morning, posting adjusted earnings of 64 cents per share on $4.6 billion in revenue, a 22% increase. Analysts had been expecting 61 cents per share on $3.98 billion in revenue.

Reported earnings per share were $1.07 billion or 93 cents, which includes a 29 cent per share positive impact for “previously disclosed gains net of litigation and restructuring charges.” In the same quarter a year ago, net income was 82 cents per share, while adjusted income was 61 cents per share. In the previous quarter, net income was 48 cents per share or 62 cents per share as adjusted.

Bank of New York Mellon by segment

The Bank of New York Mellon reported a 7% year over year increase in investment management and performance fees. Assets under management rose 7%, hitting a new record of $1.65 trillion. Management said the main drivers were higher equity market values and net new business. Long-term inflows were $13 billion, while short-term inflows were $19 billion in the third quarter. Investment services revenue increased by 5%. Assets under custody and /or administration increased 3%.

“We had a strong quarter,” said Bank of New York Mellon Chairman and CEO Gerald L. Hassell in a statement this morning. “We grew Investment Management and Investment Services fees, controlled expenses and executed on our capital plan. During the quarter, we also repositioned the Markets Group, which will improve our operating margin and return on capital. We achieved this despite a challenging environment, demonstrating the resilience of our business model and the exceptional efforts of our employees.”

The bank also reported a 3% decline in staff expenses and bought back 11 million shares for $431 million in the third quarter.

The bank posted a 26% return rate on tangible common equity or 18% as adjusted. As of the end of September, the Bank of New York Mellon reported a Tier 1 capital ratio of 12.4% and a CET1 ratio of 11.4%.

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