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BNY Mellon’s Third Quarter Earnings Top Estimates

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Earnings review

The world’s second-largest custody bank (XLF), Bank of New York Mellon (BK), reported 3Q earnings on October 20. The company’s adjusted earnings of $0.90 per share beat consensus estimates of $0.81 and were 22% higher year-over-year.

BNY Mellon’s third quarter profits and revenue rose because of lower expenses and higher assets under management. As a custody bank, BNY Mellon derives much of its business from serving trillions in assets for money managers and other clients, in addition to managing clients’ investments. Its closest competitors in this segment are State Street (STT), BlackRock (BLK), and Northern Trust (NTRS).

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“We delivered strong results for the quarter, once again meeting or exceeding our three-year Investor Day goals. Each of our businesses performed well, as total revenue was up 4 percent and our business improvement process continued to pay off, generating more than 500 basis points of positive operating leverage. Our strategy is benefiting our clients and shareholders through all market environments,” Gerald Hassell, chair and chief executive officer, said.

“We also strengthened our capital ratios while returning significant capital to shareholders through repurchases and dividends, and made progress in our resolution planning to ensure that BNY Mellon can be resolved without posing systemic risk to the financial system,” he added.

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