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

Bank of New York Mellon Beats as Fee Revenue Grows (Update 1)

  • Third-quarter EPS of 61 cents, beating consensus estimate of 54 cents.
  • Total revenue of $3.675 billion also beats.
  • Investment management fees rise 7% year-over-year

Updated with comments from Jefferies analyst Ken Usdin.

NEW YORK ( TheStreet) -- Bank of New York Mellon (BK - Get Report) on Wednesday reported a 7% year-over-year increase in management fees.

The trust and custody bank announced third-quarter net income applicable to common shareholders of $720 million, or 61 cents a share, soundly beating the consensus estimate of a 54-cent profit, among analysts polled by Thomson Reuters.

Earnings increased from $466 million, or 39 cents a share, during the second quarter (which included a litigation charge of $212 after tax, or 18 cents a share), and $651 million, or 53 cents a share, during the third quarter of 2011.

Total revenue for the third quarter was $3.675 billion, beating the consensus estimate of $3.596 billion, and increasing from $3.579 billion the previous quarter, and $3.683 billion, a year earlier.

Investment services fees totaled $1.7 billion in the third quarter, down 1% from the second quarter, and down 6% from the third quarter of 2011. The company said "the year-over-year decrease was primarily driven by lower Depositary Receipts revenue, the impact of the sale of the Shareowner Services business in the fourth quarter of 2011 and lower Corporate Trust fees, partially offset by higher asset servicing and securities lending revenue."

A third-quarter highlight for Bank of New York Mellon was $779 million in investment management and performance fee income, increasing 2% sequentially and 7% year-over-year, "driven by higher market values and net new business."

Net interest income totaled $749 million during the third quarter, increasing from $734 million the previous quarter, but declining from $775 a year earlier. The net interest margin - the difference between the average yield on loans and investments and the average cost for deposits and borrowings - continued to narrow, to 1.20% in the third quarter, from 1.25% in the second quarter, and 1.30% in the third quarter of 2011. The margin squeeze is in line with most of the industry, with the Federal Reserve keeping its target federal funds rate in a range of zero to 0.25% since the end of 2008, while the central bank in September significantly increased its purchases of long-term mortgage-backed securities, in an effort to keep long-term rates at historically low levels.
1 of 2

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
BK $40.64 0.00%
AAPL $95.03 0.21%
FB $116.73 0.00%
GOOG $691.02 0.00%
TSLA $247.54 -0.07%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs