Bank of New York Mellon's ability to bring in new business for its massive custody business propelled its quarterly profit.
The $374 billion-asset custody bank's net income rose 19% from a year earlier, to $974 million, or 90 cents a share. Total revenue rose 4% to $3.9 billion.
Assets under custody rose 7% to $30.5 trillion. The company nearly doubled its number of new asset-servicing contracts during the quarter, to $150 billion. Assets under management rose 6% to $1.7 trillion.
Noninterest income rose 3% to $3.2 billion on higher fees for issuer services, along with a rise in investment management and performance fees. Asset-servicing fees, the largest portion of BNY Mellon's fee revenue, rose 1% to $1.1 billion on higher money-market fees and securities lending revenue.
Foreign exchange revenue fell 3% to $175 million on lower trading volume and clients migrating to lower-margin products. Money market fee waivers fell 61% to $11 million as the compny eliminated waivers.
Net interest revenue rose 2% to $774 million as the company reduced lower-yielding interest-earning assets. The company also benefited from higher market interest rates.
BNY Mellon said that it may issue $2 billion to $4 billion of long-term debt, above its typical funding requirements, by next year to satisfy resource needs in times of distress. The added debt may reduce future net interest revenue.
Noninterest expense fell 1% to $2.6 billion due to a stronger U.S. dollar, along with lower costs for software, legal services and net occupancy and business development expenses.
