Bank of New York Mellon, the custody bank under pressure from activist investor Trian Fund Management to lift its share price, declined the most in nine months after reporting fourth-quarter earnings that missed analysts' estimates.

BNY Mellon fell as much as 4.4%, the most since April 2, after adjusted earnings of 58 cents a share fell short of the 59-cent average estimate of 16 analysts in a Bloomberg survey. The company reported net income of $807 million for the quarter, an increase of 57% from a year earlier. Earnings were boosted by a previously-disclosed tax benefit.

Chief Executive Gerald Hassell has jettisoned assets and cut costs at the world's largest custody bank to offset the drag caused by low interest rates. The presence of activist investors such as Trian will keep pressure on the bank to do more, said Marty Mosby, an analyst at Vining Sparks in Memphis, Tenn.

"BNY will have to keep showing efficiency gains and pushing revenue higher," Mosby said in a telephone interview. He has a "market perform" rating on the stock.

Rival custody bank State Street said Friday fourth-quarter profit fell 3.7% as expenses rose faster than revenue. Chicago-based Northern Trust Corp. said Jan. 21 that its earnings climbed 38% in the same quarter.

BNY Mellon said its revenue grew 2% from the fourth quarter of 2013 as both assets under custody and administration and assets under management rose. Fees were hurt by the strength of the U.S. dollar. Non-interest expenses declined 5%, which the bank attributed to a lower headcount and the replacement of technology contractors with permanent staff.

"It is a very tough revenue environment so we will have to be even more diligent on the expense side," Hassell said in a conference call with investors.

Since October the bank has been charging a fee on euro-denominated deposits. Hassell said if rates in Europe go lower, BNY Mellon might have to push those fees higher. "We can get more aggressive if we need to be," he said.

BNY Mellon gave a board seat to Trian's Ed Garden last month. The firm, co-founded in 2005 by Nelson Peltz, Peter May and Garden, in June said it acquired a 2.5% stake in BNY Mellon. It stepped in after the bank's pretax margin was smaller than rivals State Street and Northern Trust in four of the five past fiscal years, according to data compiled by Bloomberg.

Hassell set a goal of at least 7% to 9% growth in operating earnings per share for the period 2015 to 2017 in an October presentation. That target assumes interest rates stay at current low levels. Higher rates would translate to faster growth, Hassell told analysts.

Custody banks keep records, track performance and lend securities for institutional investors. BNY Mellon also manages investments for institutions and individuals. Like other custody banks, BNY Mellon has been hampered by low rates, which cut income from its investment portfolio, hold down revenue from securities lending and force the bank to waive fees on money-market funds.

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