Macroeconomic conditions mostly benefited Bank of New York Mellon, which reported higher fee revenue from numerous business lines in the first quarter, including asset servicing and investment management.

The $374 billion-asset company’s net income increased 29% to $1.14 billion from a year earlier. Earnings per share of $1.10 were 15 cents better than the mean estimate of analysts compiled by FactSet Research Systems.

Fee revenue, after securities losses, increased 8% to $3.3 billion as a result of higher equity values and the favorable impact of the weaker U.S. dollar.

Charles Scharf, then the chief executive officer of Visa, speaks during the Institute of International Finance G-20 Conference in Shanghai, China.
Market forces
Equities markets and interest rate increases have benefited Bank of New York Mellon, CEO Charles Scharf says Bloomberg News

“Strong equity markets and higher interest rates were important drivers” of BNY Mellon’s improvement in profit and revenue, Chairman and CEO Charles Scharf said in a news release Thursday.

Pretax income from BNY Mellon’s investment services group, which includes asset servicing and the Pershing trade clearinghouse, climbed 22% to $1.2 billion.

Foreign exchange trading rose 10% to $169 million. The value of securities on loan to third parties increased 39% to $436 billion. Revenue from investment management climbed 13% to $1.1 billion.

Assets under custody and administration jumped 9% to $33.5 trillion due to higher market values and business development. Assets under management increased 8% to $1.9 trillion.

Net interest revenue rose 16% to $919 million as a result of higher interest rates and higher deposit levels.

Noninterest expense climbed 4% to $2.7 billion, largely due to a weaker U.S. dollar, higher salaries and employee benefits and increased expenses for subcustodian and clearing services. The company’s federal income tax rate was 19.5%.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.