BNY Mellon has posted a fall in net income and a drop in fee revenue and net interest revenue in Q3 2020 as the Covid-19 crisis continues to upend markets.

Key group metrics

The investment manager’s net income applicable to common shareholders for the three-month-period ending September 2020 was $876m. This is a 13% decrease from last year’s figure of $1bn.

Total revenue remained almost stable at $3.85bn, with fee revenue dipping 1% to $3.11bn driven by higher money market fee waivers. Net interest revenue dropped 4% year-on-year to $703m.

Provision for credit losses were $9m in Q3 2020, versus $143m in the previous quarter reflecting a fairly consistent macroeconomic outlook, stated the firm.

Higher market values, higher client inflows and the favourable impact of a weaker US dollar led to an 8% rise in assets under custody and/or administration to $38.6trn.

Assets under management rose 9% to $2trn.

Investment and Wealth Management

Income before taxes at the business decreased 17% to $245m from $295m while total revenue of $918m was 3% higher than the previous year.

In Investment Management, revenue increased 5% to $641m from $608m.

The firm attributed the rise to the impact of hedging activities, higher market values, as well as higher performance fees.

Wealth Management revenue dropped 1% to $277m on a year-on-year basis.

Investment Services

Income before taxes at the business declined 17% to $917m from $1.1bn.

Total revenue at the business dropped 4% to $2.93bn, with Asset Servicing, Pershing, Issuer Services, and Clearance and Collateral Management all reporting fall in revenue.

Treasury Services reported a rise in revenue, driven by higher client deposits and money market balances.

BNY Mellon CEO Todd Gibbons said: “Our third quarter results reflect the resilience of our business model despite the significant impact of lower rates and associated money market fee waivers, as we reported EPS of 98 cents, down 8 percent year on year.

“Our operating margin was 30 percent as we controlled costs, and our return on tangible common equity was solid at 17 percent.”