BNY Mellon shares tumble after earnings miss
Shares in BNY Mellon have fallen eight per cent in US trading after the lender’s fourth-quarter profit missed analysts’ estimates today.
Net income at the US’s biggest custodian bank rose 67 per cent year on year in the final quarter to $1.4bn (£1.1bn) – but much of this was due to the sale of an unspecified asset.
When this one-time boost was stripped away, net income was $989m. This took earnings per share to $1.01, missing analysts’ expectations of $1.04.
The bank’s shares had fallen eight per cent four hours into trading to $46.67.
BNY Mellon – which specialises in investment management and services – said low interest rates had dented its bottom line this year, taking a chunk out of its interest revenue.
Many of the major US banks reporting this season cited the Federal Reserve’s rate cuts in 2019 as adding to pressure on their profits.
“Although we continue to be negatively impacted by lower rates, a flat yield curve and low foreign exchange volatility, we remain intensely focused on carefully managing costs,” interim chief executive Todd Gibbons said.
With the one-time boost taken away, revenue rose fell marginally compared to a year earlier to $4bn in the fourth quarter.
Interest revenue fell eight per cent year on year to $815m in the fourth quarter.
Gibbons said: “In 2020, we plan to continue investing in technology to further enhance service quality, launch new capabilities, drive additional efficiencies and improve resilience.”
BNY Mellon’s assets under custody and administration climbed 12 per cent year on year to $37.1 trillion in the final three months of 2019.