BNY Mellon’s per-share earnings slide 8.41% in the fiscal third quarter

By: Wajeeh Khan
Wajeeh Khan
Wajeeh is an active follower of world affairs, technology, an avid reader, and loves to play table tennis in… read more.
on Oct 16, 2020
  • BNY Mellon’s per-share earnings slide 8.41% in the fiscal third quarter.
  • The investment bank sees a 0.36% decline in its third-quarter revenue.
  • The American multinational's CET1 ratio jumps to 13.0% in the 3rd quarter.

Bank of New York Mellon (NYSE: BK) published its earnings report for the fiscal third quarter on Friday that topped analysts’ estimates for earnings and revenue. Its financial report came a day after peer, Morgan Stanley, said its net income climbed to £2.11 billion in Q3.

BNY Mellon was reported 1.1% down in premarket trading on Friday. On a year to date basis, shares of the company are now close to 25% down. BNY Mellon had recorded an annual growth of 8% in the stock market last year. Here’s what you need to know about the different types of stock investments.

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BNY Mellon’s Q3 financial results versus analysts’ estimates

Experts had forecast BNY Mellon to print £2.97 billion of revenue in the third quarter. Their estimate for earnings per share was capped at 73 pence per share. In its report on Friday, the investment bank topped both estimates posting a slightly higher £2.98 billion of revenue and 76 pence of earnings per share in Q3.

On a year over year basis, BNY Mellon noted a 0.36% decline in its third-quarter revenue and an 8.41% decline in per-share earnings. The American multinational refrained from giving future guidance on Friday.

Other prominent figures in BNY Mellon’s financial results include a 1% annualised decline in fee revenue and a broader 4% decline in net interest revenue. At £2.09 billion, its total noninterest expense came in 4% higher than last year.

The U.S. investment bank reported a 4% year over year decline in revenue from investment services that was partly offset by a 3% growth in its investment and wealth management segment in the third quarter.

BNY Mellon’s CET1 ratio jumps to 13.0% in the third quarter

BNY Mellon valued its provisions to cover for bad loans at £6.98 million. Its common equity tier 1 (CET1) ratio jumped 40 base points in the third quarter to 13.0%. CEO Todd Gibbons commented on the financial update on Friday and 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. Our operating margin was 30% as we controlled costs, and our return on tangible common equity was solid at 17%.”

BNY Mellon declared 24 pence per share of dividend on Friday. At the time of writing, the investment bank is valued at £25.56 billion and has a price to earnings ratio of 8.03.

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