BNY Q3 Earnings: Fee Income Soars 5%, Setting New $50T Record In Assets Under Custody

The Bank Of New York Mellon Corporation BK shares are trading higher in the premarket session on Friday after its third-quarter results.

The finance behemoth reported third-quarter adjusted earnings per share of $1.52 (+20% YoY), beating the street view of $1.42.

Quarterly revenue of $4.648 billion, an increase of 5% year-over-year, surpassed the analyst consensus of $4.542 billion.

Net interest income rose by 3% YoY, driven mainly by higher yields from the investment securities portfolio and balance sheet expansion, though partially offset by shifts in the deposit mix.

Fee revenue in the quarter grew 5% year over year to $3.404 billion. Investment revenue rose, reflecting a strategic equity loss in 3Q23 and better seed capital investment performance.

Noninterest expense for the quarter stood at $3.1 billion flat YoY, as higher investments and merit increases were offset by efficiency savings and a reduced FDIC assessment. Excluding notable items, it increased 1%.

The Bank of New York Mellon reported average deposits of $285 billion, which increased 9% year over year and remained flat sequentially.

Related: Higher Fee Income to Aid BNY Mellon’s Q3 Earnings, Subdued NIR to Hurt

The company stated that its third-quarter tier 1 leverage ratio of 6.0% decreased 4 bps year-over-year and increased 19 bps sequentially. Adjusted pre-tax operating margin totaled 33% (vs. 31% a year ago).

As of September-end, CET1 capital was $19.7 billion, and Tier 1 capital was $24.0 billion, up from June-end, due to earnings, partially offset by stock repurchases and dividends.

Dividend: BNY declared a common stock dividend of $0.47 per share, payable on November 1 to shareholders of record as of the close of business on October 21.

The bank returned $1.08 billion to common shareholders, including $353 million in dividends and $725 million in share repurchases, achieving a total payout ratio of 103% year-to-date.

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“BNY reported strong third quarter results, reflecting growth across our three business segments and consistent execution against our strategic priorities, with assets under custody and/or administration exceeding $50 trillion for the first time,” commented Robin Vince, President and Chief Executive Officer.

“Our actions to run our company better, including our ongoing transition to a platforms operating model, are starting to deliver progress toward our medium-term financial targets and additional capacity to reinvest for growth through new and enhanced client solutions,” added Vince.

Price Action: BK shares are trading higher by 2.07% to $75.99 premarket at the last check Friday.

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