Bank of New York Mellon Corp.'s sale of its Shareowner Services business to a Melbourne, Australia, firm will lower its profits in the fourth quarter, but will bolster its capital levels going forward.
The world's largest custody bank sold the unit, which provides transfer agency and employee equity services to publicly traded U.S. companies, to Computershare for about $550 million in cash. The deal was announced in April and closed Saturday.
BNY Mellon said Tuesday that the sale would result in a "modest after-tax loss," to be reflected in the fourth quarter, due to a non-deductible goodwill charge associated with the business. The company earned $651 million in the quarter that ended Sept. 30.
But the sale is expected to add roughly $200 million to its capital base, which the company said would boost its Basel III Tier 1 common equity ratio by 20 basis points. At Sept. 30, BNY Mellon reported a Basel III Tier 1 common equity ratio of 6.6%.
Computershare provides transfer agency, share registration, employee equity plans, stakeholder communications and other financial and governance services. It has more than 10,000 employees worldwide.