BNY beats forecasts as quarterly profits jump 20%

(Sharecast News) - The Bank of New York Mellon reported double-digit growth in third-quarter revenues and profits on Thursday, beating market expectations as higher client activity, new business and rising asset values boosted performance.

Total revenue increased 12% year-on-year to $5.68bn, ahead of consensus forecasts of $5.55bn, while net income attributable to common shareholders jumped 20% to $1.61bn.

Diluted earnings per share rose 24% to $2.34, beating expectations of $2.27, while adjusted EPS came in at $2.37. Non-interest expenses climbed 8% to $3.49bn, although the pre-tax operating margin improved to 38.5% from 36.4% a year earlier.

Fee revenue increased 12% to $4.08bn, reflecting new business, higher client activity and stronger market values.

Net interest income rose 15% to $1.42bn, helped by the reinvestment of securities at higher yields and balance sheet growth, partly offset by pressure on deposit margins, the bank said.

Revenue in the securities services division increased 15% to $2.82bn, while market and wealth services revenue grew 12% to $1.98bn. Investment and wealth management revenues were up 4% at $857m.

Meanwhile, assets under custody and administration rose 10% to $63.4trn, while assets under management increased 2% to $2.2trn.

Chief executive Robin Vince said: "Our performance in the quarter once again highlights the resilience and durability of our business model against the backdrop of an overall constructive but uneven operating environment." He added that sales and pipelines remained healthy across products, client segments and regions.

BNY returned $1.4bn to shareholders during the quarter, comprising $937m of share buybacks and $436m in dividends.

Despite the better-than-expected headline numbers, shares were 1.3% lower at $135.79 in early deals on Wall Street.