An American Banker Roundup

Banking companies that are heavily dependent on fee income, particularly from trust and processing operations, have posted double-digit gains in profits, sailing through the fourth quarter with relatively few credit-quality issues.

Bank of New York Co. said its fourth-quarter profits rose 14%, to $372 million, and that its earnings per share of 50 cents met expectations on gains in revenues from securities processing. Northern Trust Corp. said its fourth-quarter profits rose 18%, to $125.5 million, from a year earlier on gains from trust fees, foreign exchange, and net interest income. Mellon Financial Corp., meanwhile, posted a 4% profit increase, to $255 million, on increased revenue from fee businesses.


Fee revenue at Bank of New York jumped 17% in the fourth quarter, to $805 million, fueled by a 26% gain in securities processing and global payment services. Fees from private-client services and asset management rose 18% in the quarter, to $77 million.

Bank of New York had exposure to problem loans in the fourth quarter, and its nonperforming assets rose 15% from the third quarter.


Pittsburgh-based Mellon met analysts' consensus earnings estimate of 52 cents a share, which it attributed to fee income from its investment management unit, as well as revenues from other fee-generating business lines.

Noninterest revenue at the $50 billion-asset banking company rose 7%, to $806 million.

Nonperforming assets grew $49 million from Sept. 30, to $271 million, primarily because of $38 million of commercial loans to a borrower in the building materials manufacturing industry.


The Chicago banking company met analysts' consensus of 54 cents a share.

Revenue from nonlending activities, mainly trust fees, rose 15%, to 389.8 million during the quarter. Nonperforming assets rose 29.5% from a year earlier.

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