BNY Mellon Posts Profit In Q1, Above Market Estimates - Update

(RTTNews) - Bank of New York Mellon Corp., or BNY Mellon (BK) reported Tuesday a profit in its first quarter, compared to prior year's loss, benefited by the absence of prior year's hefty charges. Earnings per share topped analysts' estimates.

The company attributed that its performance was benefited from strength in clearing services, the eighteenth consecutive quarter of positive long-term inflows in investment management and the growing contribution from global collateral services and electronic foreign exchange initiatives.

For the first quarter, net income applicable to common shareholders was $661 million or $0.57 per share, compared to prior year's net loss of $266 million or $0.23 per share. The prior year's results included a charge related to the U.S. Tax Court's disallowance of certain foreign tax credits of $854 million or $0.73 per share. The company's last year's net income excluding the charge was $588 million or $0.50 per share.

On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $0.53 per share for the quarter. Analysts' estimates typically exclude special items.

Investment Management and Investment Services fees increased 3 percent and the company managed expenses well, resulting in pretax earnings growth of 12 percent, the company noted.

Total revenues were $3.647 billion, slightly higher than prior year's $3.629 billion. Adjusted revenue was $3.627 billion, compared to $3.613 billion a year ago. Analysts estimated revenues of $3.73 billion for the quarter.

The company noted that its prior periods were restated to reflect the retrospective application of adopting new accounting guidance.

Fee and other revenues increased 1 percent year-over-year to $2.88 billion. Net interest revenue was $728 million, compared to last year's $719 million. Net interest margin on an FTE basis were 1.05 percent, compared to 1.11 percent last year.

The provision for credit losses was a credit of $18 million driven by the continued improvement in the credit quality of the loan portfolio, compared to prior year's credit of $24 million.

Assets under custody and/or administration amounted to $27.9 trillion as of March 31, an increase of 6 percent compared with the prior year.

As announced earlier, the bank announced a 13 percent increase in the quarterly common stock dividend to $0.17 per share from $0.15 per share. This cash dividend is payable on May 7 to shareholders of record on April 25. The bank also declared dvidends for the noncumulative perpetual preferred stock.

Looking ahead, Gerald Hassell, chairman and chief executive officer, said, "The management team is focused on actively realigning the business model for the new regulatory environment, controlling expenses and generating strong returns on tangible common equity."

BNY Mellon hares closed Monday's trading at $33.71, down $0.05 or 0.15 percent.