Analysts last week praised banks for their ability to make money in a climate where loan growth is sluggish at best.
Mellon Bank Corp., a $42.6 billion-asset Pittsburgh company and the last big bank to report at week's end, exemplified the trend. Fueled by fee businesses, such as trust and investment management, Mellon reported income of $179 million, a 9% increase from a year ago. Earnings per share for the quarter were $1.34, which met analysts' projections.
Mellon's noninterest income was significantly helped by the sale of $770 million in credit card loans to PNC Bank Corp.
Total noninterest income was up 26.4%, to $569 million. Excluding the sale of the credit card loans, Mellon said its quarterly noninterest income rose 15% over a year ago, thanks to big gains in institutional trust, mutual funds, and other fee businesses.
"In general, Mellon is way ahead of banks in proportion of revenues that consist of fees," said James M. Schutz, an analyst with ABN Amro Chicago Corp.