Bank Of New York Mellon Beats Q3 Earnings Estimates On Higher Interest Rates

Bank of New York Mellon Corp BK reported a Q3 FY23 revenue increase of 2% Y/Y to $4.37 billion, beating the consensus of $4.33 billion.

Net interest revenue increased 10% Y/Y to $1.02 billion due to higher interest rates. 

Fee revenue remained flat Y/Y at $3.245 billion, reflecting higher market values, net new business, and the favorable impact of weak USD, partly negated by Alcentra divestiture, cumulative AUM flows, and lower foreign exchange volatility and volumes. 

Total noninterest expense totaled $3.1 billion, down 16% Y/Y, or +3% Y/Y excluding notable items.

The pre-tax operating margin was 29%, compared with 15% in Q3 FY22.

Provision for credit losses was $3 million in the quarter vs. a benefit of a $30 million a year ago

Adjusted EPS was $1.27 (+5% Y/Y), above the consensus of $1.15.

AUM was $1.8 trillion, an increase of 3%, aided by the favorable impact of a weaker USD and higher market values. 

CET1 ratio was 11.4% for the quarter, compared to 11.1% in Q2 FY23.

"We committed to drive higher underlying growth and enhanced operational efficiency. While it is still early on our journey, we are starting to see the signs of progress inside the company. We are innovating and pushing forward on our multi-year growth investments all while remaining disciplined to deliver positive operating leverage and pre-tax margin expansion," said Robin Vince, President and Chief Executive Officer. 

Price Action: BK shares are trading higher by 0.74% at $42.15 premarket on the last check Tuesday.