Why Is Bank Of New York Mellon Stock Gaining Today?

The Bank Of New York Mellon Corporation BK shares are trading higher in the premarket session on Friday after it reported second-quarter fiscal 2024 results.

The finance behemoth reported second-quarter adjusted earnings per share of $1.51, beating the street view of $1.43.

Quarterly revenue of $4.597 billion, an increase of 2% year-over-year, surpassed the analyst consensus of $4.523 billion.

Net interest income decreased 6%, primarily reflecting changes in the balance sheet mix, partially offset by higher interest rates.

Fee revenue in the quarter under review grew 4% year over year to $3.398 billion. Investment and other revenue increased, reflecting higher client activity in fixed-income and equity trading businesses.

Noninterest expense of $3.07 billion declined 1% in the quarter or increased 1%, excluding notable items.

The Bank Of New York Mellon reported average deposits of $285 billion, increasing 3% year over year and 2% sequentially.

The company stated that its second-quarter tier 1 leverage ratio of 5.8% increased 16 bps year over year and decreased 6 bps sequentially. Adjusted pre-tax operating margin totaled 33% (vs. 32% a year ago).

As of June-end, CET1 capital was $18.7 billion, and Tier 1 capital was $23.0 billion, up from March-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 August 2, to shareholders of record as of the close of business on July 22. After the Federal Reserve’s 2024 bank stress test results in June, the bank raised its common dividend by 12%, effective this quarter.

“Halfway through the year, we’re pleased with the progress we have made, but we are focused on running our company better and the hard work ahead. As highlighted in our improved financial performance to-date, we are starting to demonstrate the power of BNY’s franchise to our clients and shareholders, and we remain in execution mode to unlock the company’s full potential,” said Robin Vince, President and Chief Executive Officer.

The bank returned $923 million to common shareholders, including $322 million in dividends and $601 million in share repurchases, achieving a total payout ratio of 107% year-to-date.

Price Action: BK shares are trading higher by 1.81% to $62.58 premarket at the last check Friday.

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