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April 19, 2022

BNY Mellon Q1 profit down 18%; takes $88m hit from Russia withdrawal

Bank of New York Mellon (BNY Mellon) has reported a net income applicable to common shareholders of $699m for Q1 2022, a decline of 18% compared with $858m a year ago.

For the quarter ended 31 March 2022, revenues were $3.9bn, almost flat compared to the year ago quarter.

The bank’s fee revenue decreased 3% in the quarter to $3.1bn, including an $88m reduction resulting from increased amortisation of deferred costs for depositary receipts services related to Russia.

Net interest revenue jumped 7% to $698m from $655m in the year-ago quarter, largely due to higher interest rates on interest-earning assets and a change in asset mix and lower funding expense. The gains were partially offset by lower interest-earning assets.

Noninterest expense increased to $3.01bn from $2.85bn in Q1 2021.

BNY Mellon posted an adjusted pretax operating margin of 41% in Q1 2022, compared with 46% in the previous year.

Securities Services’ total revenue of $1.78bn was roughly unchanged from a year ago. Market and Wealth Services total revenue of $1.20bn, also flat year-on-year.

Provision for credit losses was $2m against a benefit of $83m in the year-ago quarter.

BNY Mellon’s assets under custody and/or administration (AUC/A) rose 9% to $45.5trn in Q1 2022, while assets under management (AUM) increased 2% to $2.3trn.

BNY Mellon CEO Todd Gibbons said: “We generated a significant amount of capital and returned close to 60% of earnings to our shareholders, primarily through common dividends.

“Throughout the quarter, we took actions in the investment securities portfolio to temper the immediate impact to capital from higher interest rates. And we expect higher interest rates to be a positive for both fee and net interest revenue going forward.”

In the previous quarter, BNY Mellon recorded 4% increase in total revenue.

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