Bank Of New York Mellon Shares Up After Q4 Earnings Beat, Gears Up To Mark 240th Anniversary In Banking Business

The Bank Of New York Mellon Corporation BK reported a fourth quarter 2023 adjusted revenue increase of 2% Y/Y to $4.461 billion, beating the consensus of $4.29 billion.

Net interest revenue increased 4% Y/Y to $1.10 billion due to higher interest rates. Fee revenue was flat at $3.214 billion, primarily reflecting lower foreign exchange volatility and volumes and the mix of AUM flows, partially offset by higher market values and the favorable impact of a weaker U.S. dollar. 

Total noninterest expense totaled $3.868 billion, up 20.4% Y/Y. The adjusted pre-tax operating margin was 28%, compared with 31% in the prior-year period.

Provision for credit losses was $84 million, primarily driven by reserve increases related to commercial real estate exposure. Adjusted EPS was $1.28, above the consensus of $1.13.

AUM of $2 trillion increased by 8%, primarily reflecting higher market values and the favorable impact of a weaker U.S. dollar, partially offset by cumulative net outflows.

CET1 ratio was 11.6% for the quarter, compared to 11.2% a year ago.

“We exceeded the financial outlook that we communicated at the beginning of last year and today we are announcing further improved financial targets for each of our business segments and the firm overall in the medium-term,” said Robin Vince, President and Chief Executive Officer. 

The company declared a quarterly common stock dividend of $0.42 per share, payable on February 2, 2024, to shareholders of record as of the close of business on January 22, 2024.

“We further strengthened our regulatory capital and liquidity ratios, all while returning $3.9 billion of capital, or 123% of earnings, to common shareholders in 2023. We are entering 2024, the year of our 240th anniversary, on a strong footing and with great momentum,” Vince added.

Price Action: BK shares are trading higher by 3.85% at $54.76 on the last check Friday.

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