BOSTON, Oct 17 (Reuters) - Bank of New York Mellon Corp’s foreign exchange revenue, hit hard by changing client behavior and lower volatility in currency markets, might not stage a comeback at the world’s largest custody bank, Chief Executive Gerald Hassell warned on Wednesday.
“So we’re not going to rely on foreign exchange coming back to the degree that it did,” Hassell said on a conference call with analysts and investors.
BNY Mellon said on Wednesday that third-quarter total fee revenue, which was nearly flat at $2.88 billion, was hurt by a 45 percent decline in foreign exchange revenue. Rival State Street Corp’s third-quarter foreign exchange revenue dropped 44 percent to $115 million from $204 million a year earlier.
Both custody banks have been fighting lawsuits from customers and U.S. authorities accusing them of overcharging on some forex trades. While the banks deny any wrongdoing, they concede that customers have shifted some of their forex activity to cheaper alternatives.