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Bank of New York Mellon Earnings Slip
Bank of New York Mellon reported Wednesday that its first-quarter earnings fell 1 percent as revenue lost from the sale of a unit and lower foreign-exchange trading offset gains from rising asset levels.
The bank said its net income fell to $619 million, or 52 cents a share, from $625 million, or 50 cents a share, a year earlier. Analysts had expected Bank of New York Mellon to report a profit of 51 cents a share, according to the average of 15 estimates in a Bloomberg survey.
“They put up decent numbers in a challenging environment,” said Gerard Cassidy, an analyst with RBC Capital Markets. “When interest rates finally go up, this bank and its competitors should see some relief.”
Bank of New York Mellon said revenue from foreign-exchange trading, the subject of lawsuits against the bank, declined 21 percent from a year earlier. The bank’s chief executive, Gerald L. Hassell, who in November outlined expense cuts aimed at saving as much as $700 million before taxes by 2015, said some savings are already materializing as compensation and software expenses fell.
“We are seeing the early results of our operational excellence initiatives as we generated significant positive operating leverage relative to the fourth quarter,” Mr. Hassell said in a statement.
In August, the bank said it planned to cut 1,500 jobs, or 3 percent, of its work force. Its competitors, State Street of Boston and Northern Trust of Chicago, have taken similar steps.
Bank of New York Mellon, which earns fees on assets it manages and oversees for clients, was helped by a 12 percent gain in the Standard & Poor’s 500-stock index in the first quarter.
Assets under custody and administration rose 4 percent to a record $26.6 trillion, and assets under management climbed 6 percent to $1.3 trillion, also a record, the bank said.
Fees from investment services fell 3.6 percent as a result of the fourth-quarter sale of the shareholder services business to Computershare. Investment management fees dropped 2.4 percent because of higher money-market waivers, the bank said in its statement.
Earnings per share climbed as the number of shares outstanding declined.
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