This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

BNY Mellon: Global Custodian of Assets

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK (Trefis) -- BNY Mellon's (BNY) stock dropped a bit after the firm missed analyst estimates in its first quarter earnings report on April 19.

BNY Mellon primarily competes with State Street (STT), JPMorgan Chase (JPM) and Citigroup (C) in providing investment services including asset servicing, issuer services, clearing services and investment management services to institutional investors and high-net worth individuals around the world.

Despite the recent quarterly results, we maintain a $35.76 price estimate for BNY Mellon's stock, about 25% above market price. We project healthy growth for the firm's asset servicing arm.

BNY Mellon is the largest custodian of assets in the world with $25 trillion worth of assets under custody. The asset servicing fees that BNY Mellon earns on its AuC represent the largest revenue stream for the firm, contributing more than 20% of the firm's $13.8 billion revenues in 2010.

While we believe that asset servicing fees as a percentage of AuC will remain constant at current levels of 0.11% going forward, these fees will get a lift from our projected increase in BNY Mellon's assets under custody to over $43 trillion by the end of our forecast period.

BNY Mellon should continue to do well this area. As investors increasingly invest in cross-border assets, emerging markets and more complex financial instruments, they will require the presence of large global custodians above local/regional players or financial service providers' in-house investment servicing teams.

This will have a positive impact on BNY Mellon, which is already the largest custodian in the world with a presence in over 100 financial markets and over 25 countries.

In addition, in many countries, the state is withdrawing from its role as a primary pension provider, causing citizens to invest in defined-contribution pension plans and mutual funds. Since custody providers serve institutional investors like mutual and pension funds, this development creates promising growth prospects for custodians' assets under custody.

See our complete analysis of BNY Mellon stock here.

Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.

Stock quotes in this article: BNY 
This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs