Bank of New York Mellon Corp.'s fourth-quarter earnings soared as the asset manager and security adviser freed itself of the securities losses that hobbled it in past quarters.
In the third quarter, Bank of New York Mellon sold or restructured billions of dollars in risky investments, a move that hurt its bottom line at the time but set it up for fewer one-time charges or losses. The company struggled last year with investment write-downs and securities losses because of troubles at secondary businesses like those related to real estate and ongoing weakness in fee revenue.
But in the most recent period, total fee revenue jumped 43% to $2.58 billion, while net securities gains were $15 million, after $1.24 billion in losses a year earlier. Net interest revenue fell by a third to $724 million but rose slightly from the previous quarter.
Chief Executive Robert Kelly said the continuation of low interest rates continued to challenge net interest and fee revenue. But he noted the company saw "excellent growth" in asset and wealth management revenue during the quarter.
Bank of New York posted a profit of $594 million, or 49 cents a share, from $66 million, or 2 cents per share, a year earlier. Excluding restructuring charges and other impacts, the latest quarter's earnings were 60 cents. Analysts polled by Thomson Reuters, on average, anticipated a 51-cent profit.
Formed in July 2007 when Bank of New York acquired Mellon Financial Corp., it is a "custodial bank," which generally holds investments and securities for other investors.
Bank of New York shares closed Tuesday at $29.53 and weren't active premarket. The stock was flat in 2009 and has risen since the beginning of the year.