BNY Mellon has reported a 50% slump in net income and a 20% decrease in total revenue in Q4 2020. However, the firm registered growth in both assets under custody and/or administration (AUC/A) and assets under management (AUM).
Q4 2020 highlights
The firm posted a net income applicable to common shareholders of $702m in Q4 2020, versus $1.39bn in the prior year. Total revenue dropped to $3.84bn from $4.78bn.
Lower severance expense led to a 1% fall in noninterest expense to $2.92bn from $2.96bn. This was offset by higher litigation expense and real estate charges.
Higher market values, net inflows along with the favourable impact of a weaker US dollar mainly compared to the British pound led to a 15% year-on-year growth in AUM to $2.2trn. AUC/A rose 11% to $41.1trn.
The firm’s CET1 ratio, a key measure of strength, stood at 13.1% at the end of December 2020 compared with 11.5% a year ago.
Investment and Wealth Management
Income before taxes at the unit was $311m for the quarter to December 2020, a 30% surge from $240m in the previous year.
The division’s total revenue rose 2% to $990m from $971m, with investment management producing $714m and wealth management contributing $641m.
The unit’s income before taxes was 700m in Q4 2020, 17% lower than the corresponding quarter of 2019.
Total revenue decreased 4% year-on-year to $2.9bn, with revenue decreasing across Asset Servicing, Pershing, Issuer Services, Treasury Services, and Clearance and Collateral Management.
BNY Mellon CEO Todd Gibbons said: “Full-year EPS was $3.83, down from $4.51, reflecting the impact of notable items. On an operating basis EPS was flat at $4.01, despite the impact of credit provisions, lower interest rates and associated money market fee waivers.
“While the full-year impact of low interest rates will be a significant headwind in 2021, we ended the year with momentum in our core franchise.”
Recently, British fund manager Janus Henderson tapped BNY Mellon for its global data management platform.
Moreover, last month, Guardian Capital Group agreed to buy BNY Mellon’s Canadian wealth management business.