Bank Of New York Mellon Beats Q2 Street Expectations

The Bank Of New York Mellon Corporation BK reported a second-quarter total revenue increase of 5% year-over-year to $4.45 billion, beating the consensus of $4.37 billion.

Net interest revenue increased 33% YoY to $1.1 billion due to higher interest rates, and Fee revenue decreased 2% to $3.26 billion, reflecting lower foreign exchange revenue, the impact of the Alcentra divestiture.

Provision for credit losses was $5 million, reflecting changes in the macroeconomic forecast driving increased reserves related to commercial real estate, partially offset by a reduction in reserves related to financial institutions.

Securities services revenue increased by 12% YoY; Market and Wealth Services increased by 10%, and Investment and Wealth Management decreased by 10%.

Total noninterest expense totaled $3.1 billion, flat YoY or +1% excluding notable items.

The pre-tax operating margin was 30%, compared with 26% in 2Q22.

Adjusted EPS was $1.38 (+20% Y/Y), above the consensus of $1.22.

AUM was $1.9 trillion, a decline of 2%, due to lower market values driven by the year-over-year decrease in U.K. fixed-income markets and the divestiture of Alcentra.

CET1 ratio was 11.1% for the quarter, compared to 11.2% in 1Q23.

Dividend raised by 13.5%: BK declared a quarterly common stock dividend of $0.42 per share (prior $0.37), payable on August 10, 2023, to shareholders of record as of the close of business on July 28, 2023.

“In the second quarter we saw particular strength in Clearance and Collateral Management and Depositary Receipts, and our recently launched solutions, such as Pershing’s innovative Wove advisory platform, give us confidence that revenues will build over time,” commented Robin Vince, President and Chief Executive Officer.

Price Action: BK shares are trading lower by 0.55% at $43.30 premarket on Tuesday.