BNY Mellon beats on earnings as fee income rises

Bank of New York Mellon reported a 1% fall in total revenue in its second quarter on Thursday, to $4bn, though it did beat Wall Street estimates on earnings as fee income improved.

The company said fee revenue was ahead 4%, or by 10% excluding money market fee waivers, while other revenue decreased $50m.

Net interest revenue was down 17%, although a weaker dollar increased total revenue by around 2%.

BNY Mellon said its provision for credit losses was a benefit of $86m, while its total noninterest expense was $2.8bn, up 3%, with the weaker dollar increasing expenses by about 2%.

Looking at its investment services operation, BNY Mellon said total revenue decreased 4%, while income before taxes increased 3%, and assets under custody and administration grew 21% to $45trn.

In investment and wealth management, total revenue increased 13% and income before taxes was ahead 48%, while assets under management was 18% higher at $2.3trn.

On the capital front, BNY Mellon repurchased 12.8 million common shares in the period for $618m, and paid dividends of $273m to common shareholders, including dividend-equivalents on share-based awards.

It was authorised to repurchase up to $6bn of common shares through the fourth quarter of 2022, and to increase its quarterly dividend by 10% to 34 cents per common share in the third quarter of 2021.

“Our investments in digitisation and open-architecture modular solutions continue to pay off, and we are being recognised as a leading innovator enabling clients to optimize, scale and grow their businesses,” said chief executive officer Todd Gibbons.

“As we continued to generate further excess capital in the quarter, we were pleased with the results of this year’s supervisory stress tests.”

Gibbons said the stress capital buffer framework allowed BNY Mellon to start returning its “significant” excess capital to shareholders, beginning in the third quarter.

“We increased our common dividend by 10% to 34 cents per share, and received authorisation from our board to repurchase up to $6bn of common stock through the fourth quarter of 2022.”