Bank of New York Mellon’s 4Q15 Earnings per Share Top Estimates
Bank of New York Mellon's 4Q15 Earnings Beat Estimates
Bank of New York Mellon’s 4Q15 earnings review
The world’s second-largest custodian bank, Bank of New York Mellon (BK), reported its fourth-quarter earnings yesterday. Its fourth-quarter profits beat Wall Street (SPY) analysts’ expectations as the company remained focused on trimming expenses to offset the impact of low interest rates and global turbulence. Shares of the company plunged by 3.2% following the earnings release.
The chief operating officer of the company, Gerald Hassell, said that generating revenue growth is becoming challenging for custodian banks. Low interest rates have weighed on the earnings of US banks by reducing returns on their investments and by forcing them to waive off fees on their money market funds.
Adjusted EPS (earnings per share) for the fourth quarter came in at $0.68, beating Bloomberg’s consensus estimate of $0.64. Without the adjustment for impairment charges, the company’s EPS was $0.57. Revenues of $3.7 billion fell short of estimates of $3.8 billion. The company recorded net income of $637 million, or $755 million after taking into consideration impairment charges.
Company overview
Bank of New York Mellon is a custodian bank. Custodian banks keep records, track performance, and lend securities for institutional investors. BNY Mellon also manages investments for individuals and institutions.
Bank of New York Mellon’s two primary businesses are Investment Services and Investment Management, which offer services for each stage of investment, including creating, trading, holding, managing, distributing, and restructuring investments.
As of December 2015, the bank had $28.9 trillion in assets under custody or administration and $1.6 trillion in assets under management.
Its closest competitors are State Street Corporation (STT) and Northern Trust Corporation (NTRS). Investors seeking exposure to these stocks can invest in the Financial Select Sector SPDR Fund (XLF).
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