| Business

Larger text Larger text Smaller text Smaller text | Order Photo Reprints

BNY Mellon earnings leap

Email Newsletters

Click here to sign up for one of our email newsletters.

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

Related .pdfs
Can't view the attachment? Then download the latest version of the free, Adobe Acrobat reader here:

Get Adobe Reader
By Thomas Olson
Wednesday, Oct. 16, 2013, 7:54 a.m.

Bank of New York Mellon Corp. reported on Wednesday that quarterly earnings increased 34 percent because of a gain from a favorable tax court ruling and improved market conditions.

The world's largest custody bank earned $949 million, or 82 cents per share, in the July-September period compared with $709 million, or 61 cents per share in the same period a year ago. The earnings equaled 60 cents a share on an operating basis that excludes the tax ruling and beat Wall Street estimates of 58 cents a share.

A U.S. tax court judge decided in late September that while the bank could not claim tax credits from a loan transaction with London-based Barclays Bank plc in 2001 and 2002, BNY Mellon could deduct the undisclosed amount of interest it paid on that loan.

Earnings also benefited from cutting expenses by $170 million on an annualized basis, mainly from enhanced procurement practices and reducing its real estate costs in New York, where the bank is based.

Gerard Cassidy, an analyst at RBC Capital Markets, said he expects the bank will continue to look for expense reductions.

“The challenge for custody banks like them is that the interest rate environment puts pressure on revenue,” he said.

Namely, low rates cut into income from investments and securities lending, and require institutions to waive money market fees for clients.

Still, BNY Mellon received higher revenue from servicing and managing investments for institutions and individuals. Total revenue increased 2.8 percent to $2.96 billion from $2.88 billion.

The bank's assets under management reached a record $1.53 trillion as of Sept. 30 with both market appreciation and a strong inflow of new investments placed with the bank.

In a conference call with analysts, CEO Gerald Hassell said results reflected “solid fee growth.”

Thomas Olson is a Trib Total Media staff writer. He can be reached at 412-320-7854 or

Subscribe today! Click here for our subscription offers.



Show commenting policy

Most-Read Business Headlines

  1. Stocks wrap best week of year with slight gains
  2. Uncle Charley’s Sausage expands sales to Maryland, Virginia
  3. CMU showcases its lengthy list of fledgling companies at venture event
  4. Other segments nudge Alcoa to slim profit
  5. PNC fined for paperwork errors on municipal bond offerings
  6. Rice, Gulfport team on Utica shale pipeline system
  7. 2,000 more layoffs at U.S. Steel debated
  8. Sluggish wage growth may sap retail spending during winter holidays
  9. Alcoa supplying parts for military jets under $1.1B pact with Lockheed Martin
  10. Fed insight gives stocks room to run; S&P 500 regains 2,000 mark
  11. Last-minute China worries derailed Fed’s rate hike plans, minutes reveal