BNY Mellon Q1 Results Top Estimates

(RTTNews) - Bank of New York Mellon Corp., known as BNY Mellon (BK), reported Wednesday a profit for the first quarter that grew from last year, despite higher provisions for credit losses and income tax, reflecting lower expenses and revenue growth. Earnings per share and quarterly revenues topped analysts' expectations.

"Our first quarter results reflect continued progress in executing on our strategic priorities. Earnings per share growth was driven by higher revenues across all of our businesses, our success in holding our expenses in check and generating positive operating leverage," Chairman and CEO Gerald Hassell said.

The New York-based world's largest custody bank reported net income applicable to common shareholders of $766 million or $0.67 per share for the first quarter, higher than $661 million or $0.57 per share in the prior-year quarter.

On average, 19 analysts polled by Thomson Reuters expected the company to report earnings of $0.59 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenue for the quarter grew 6 percent to $3.85 billion from $3.65 billion, while adjusted revenues were $3.76 billion, compared to $3.63 billion in the same quarter last year, and topped fifteen Wall Street analysts' consensus estimate of $3.75 billion.

Net interest revenue remained flat with last year at $728 million, while net interest margin decreased to 0.97 percent from 1.05 percent in the previous year. Fee and other revenue grew 4 percent to $3.0 billion from last year.

"In Investment Services, growth in clearing and global collateral management was particularly noteworthy during the quarter where we have been investing to deliver enhanced capabilities to our clients. In Investment Management, our investments in the expansion of Wealth Management are paying off as we extend our brand, expand our presence in high-value U.S. markets, and connect our private banking solutions to Pershing clients," Hassell stated.

The provision for credit losses was $2 million, compared to positive $18 million in the year-ago quarter, and provision for income taxes increased to $280 million from last year's $232 million. Non-interest expense edged down 1 percent to $2.70 billion from a year ago.

The company also declared a quarterly cash dividend of $0.17 per share, payable on May 14 to shareholders of record as of the close of business on May 4, 2015.

"Our business improvement process is streamlining our organization, utilizing technology to increase efficiency and reducing our structural costs as we stay focused on achieving our Investor Day goals," Hassell added.

BK closed Tuesday's regular trading session at $41.04, up $0.02 on a volume of 3.84 million shares. In the past 52-week period, the stock has been trading in a range of $33.03 to $41.79.