Bank of New York Mellon ( NYSE: BK ) stock jumped 4.4% in Monday premarket trading after the trust bank posted better-than-expected Q3 earnings as it benefited from higher interest rates even as its assets under custody and management declined on falling markets.
"Our performance benefitted from higher interest rates and continued strength in client volumes and balances across our Securities Services and Market and Wealth Services segments," said President and CEO Robin Vince.
Its Wealth Management and Investment units were hurt by declining global markets, especially in Investment Management. Still the businesses had positive net inflow in the quarter, Vince said.
Q3 adjusted EPS of $1.21 vs. $1.08 consensus, vs. $1.03 in Q2 and $1.09 in Q3 2021. Revenue of $4.28B vs. average analyst estimate of $4.20B rose from $4.25B in the prior quarter and from $4.04B in the year-ago quarter.
Total long-term strategies inflows were $23B in Q3, vs. inflows of $14B in Q2 and $7B in Q3 2021. Market depreciation, though, hurt assets under management by $118B in Q3 compared with $241B in Q2 and $28B in the year-ago quarter.
Q3 total noninterest expense of $3.68B increased from $3.11B in the prior quarter and from $2.92B in the year-ago quarter.
BNY Mellon's ( BK ) fee revenue fell to $3.24B in Q3 from $3.34B in Q2 and from $3.27B in Q3 2021. Net interest revenue of $926M rose 12% Q/Q and 44% Y/Y.
Assets under custody fell 2% to $42.2T in Q3 vs. the prior quarter and dropped 7% from the end of Q3 2021.
Assets under management fell 8% during the quarter to $1.78T, dropping 23% on Y/Y basis.
Conference call at 2:00 PM ET.
Earlier, Bank of New York Mellon ( BK ) non-GAAP EPS of $1.21 beats by $0.13, revenue of $4.28B beats by $80M
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BNY Mellon stock climbs after Q3 earnings benefit from higher interest rates