The Bank of New York Mellon Corporation’s (BK – Free Report) third-quarter 2017 earnings per share of 94 cents surpassed the Zacks Consensus Estimate of 93 cents. The figure also came in 4.4% higher than the prior-year quarter tally.
Results benefited from an improvement in both net interest revenues and fee revenues. Also, assets under management (AUM) reflected growth. However, a marginal rise in expenses acted as a headwind.
Net income applicable to common shareholders came in at $983 million, increasing nearly 1% year over year.
Revenues Improve, Costs Rise
Total revenues (non-GAAP) for the quarter increased 2.1% year over year to $4.01 billion. The figure marginally surpassed the Zacks Consensus Estimate of $3.99 billion.
Net interest revenue, on a fully taxable-equivalent basis, was $851 million, up 8% year over year. The rise was driven by higher interest rates, partly offset by a fall in average deposits and loans.
Additionally, net interest margin grew 10 basis points year over year to 1.16%.
Total fee and other revenues increased nearly 1% from the prior-year quarter to $3.17 billion. The rise was primarily driven by higher total investment services fees, and investment management and performance fees.
Total non-interest expenses (non-GAAP) came in at $2.60 billion, increasing 1% year over year. This reflects an increase in all expense components, except net occupancy costs, business development expenses, bank assessment charges and amortization of intangible assets.
Strong Asset Position
As of Sep 30, 2017, AUM was $1.82 trillion, up 6% year over year. This reflected higher market values, net inflows and the favorable impact of a weaker U.S. dollar (principally versus the British pound).
Moreover, assets under custody and administration of $32.2 trillion were up 6% year over year. Higher market values and the favorable impact of a weaker U.S. dollar largely drove the rise.
Credit Quality: A Mixed Bag
