Bank of New York Mellon Corp.'s first-quarter earnings jumped 74% on improved fee revenue and investment gains as markets recover.
The asset manager and security adviser's recent results have rebounded on revenue gains and improved investment performances. But the persistent low-interest-rate environment globally had been challenging Bank of New York's net interest revenue and fee revenue.
In February, the bank acquired back-office operations of PNC Financial Services Group Inc. for $2.31 billion, which made the company the No. 2 provider in fund accounting, administration and transfer agency and moved it into the No. 3 spot in alternative-fund assets under administration. The bank said Tuesday that the acquisition is expected to contribute to earnings immediately.
In the most recent period, total fee revenue jumped 5% to $2.56 billion, while net securities gains were $7 million, after $295 million in losses a year earlier. Net interest revenue fell 1% to $765 million, although it rose 6% from the previous quarter.
Chairman and Chief Executive Robert Kelly said, "The economic outlook is clearly improving as demonstrated by the performance of the equity and credit markets." And the bank is focused on winning new business together with well-controlled expenses amid low interest rates, Kelly added.
Bank of New York posted a profit of $559 million, or 46 cents a share, from $322 million, or 28 cents a share, a year earlier. The latest quarter included 10-cent impact from increased litigation reserves. Analysts polled by Thomson Reuters, on average, anticipated a 53-cent profit.
Formed in July 2007 when Bank of New York acquired Mellon Financial Corp., the company is a "custodial bank," which generally holds investments and securities for other investors.
Bank of New York shares closed Monday at $32.14 and weren't active premarket.