BNY Mellon earnings rise on higher assets, shares up

BOSTON (Reuters) - Bank of New York Mellon Corp BK.N said earnings from continuing operations rose sharply in the fourth quarter on increased assets under custody and administration.

BNY Mellon, one of the world’s largest custody banks, said earnings from continuing operations jumped to $712 million from $50 million a year earlier.

Income per share was 59 cents, including a tax benefit of 4 cents. Analysts’ average forecast was 51 cents before any tax benefit, according to Thomson Reuters I/B/E/S.

Including discontinued operations, the company earned 49 cents a share.

In the year-earlier quarter, securities writedowns due to frozen credit markets reduced earnings from continuing operations by 65 cents per share.

The latest results included restructuring charges of $139 million, or 7 cents per share, mainly tied to severance costs. Headcount on December 31 was 42,200, down 300 from a year earlier.

RBC Capital Markets analyst Gerard Cassidy called the figures respectable but said the tax benefit could make them harder to reproduce in future quarters. “They had decent numbers, they weren’t bad, but weren’t great,” he said.

The company benefited from rising markets and stronger investment performance, Chief Executive Robert Kelly said in a statement. “However, the persistent low interest rate environment globally increasingly challenged our net interest revenue and fee revenue,” he added.

Assets under custody and administration were $22.3 trillion at December 31, up 10 percent from a year earlier.

Asset and wealth-management fees were $736 million, up 5 percent from a year earlier and up 13 percent from the third quarter.

Securities servicing fees fell about 4 percent to $1.21 billion on lower clearing and issuer-services revenue.

Among other products, BNY Mellon competes with banks including State Street Corp STT.N to provide shareholder services. Both banks are among those under intense political scrutiny after receiving billions of dollars in bailout funds at the peak of the financial crisis.

Shares of BNY Mellon were up 47 cents, or 1.6 percent, to $30.00 in premarket trade.

Reporting by Ross Kerber; editing by John Wallace