BNY declares Q3 profit beat as investment fees reach $2.34B

Bank of New York Mellon Corp.’s third-quarter profit topped expectations after a jump in asset values fueled a 5% increase in fee revenue. 

Investment services fees rose 5% to $2.34 billion in the third quarter while income from foreign exchange jumped 14% to $175 million, according to a statement. That helped total revenue climb to $4.65 billion, which topped the $4.55 billion average of analyst estimates compiled by Bloomberg.  

The nation’s oldest bank has been aided by a surge in asset values around the world. The S&P 500 Index, for instance, has risen more than 20% since the start of the year alone. 

That helps BNY, which generates fees based on the amount of assets that clients keep with the bank. The company, which says it touches around 20% of the world’s investable assets, said assets under custody surpassed $50 trillion for the first time ever in the quarter. 

BNY, which was founded by Alexander Hamilton in 1784, has been in the midst of an overhaul aimed at cutting costs and streamlining the institution, as well as focusing on higher margin-businesses. The company during the quarter was able to keep a lid on expenses, which remained flat at $3.1 billion.

“Our actions to run our company better, including our ongoing transition to a platforms operating model, are starting to deliver progress toward our medium-term financial targets,” Chief Executive Officer Robin Vince said in the statement. 

Net income rose 14% to $1.19 billion, or $1.50 a share. That topped the $1.41 average of analyst estimates compiled by Bloomberg. 

The firm received a nod last month from US Securities and Exchange Commission Chair Gary Gensler that the manner by which BNY is offering custody services for digital assets could be used beyond Bitcoin and Ether exchange-traded funds. Vince said on a Friday call with media that the bank is now working with clients “on real use cases,” though it is a long-term investment.

Vince also said Friday that he doesn’t believe that the SEC’s Staff Accounting Bulletin 121 — the measure establishing balance sheet requirements for crypto — should apply to the bank, a common industry refrain. The new and digital assets are merely appearing in a “different wrapper,” Vince said.