This Day On The Street
Continue to site
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

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.
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.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BNY $15.83 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%
TSLA $240.76 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs