The Bank of New York Mellon Corporation gained significant growth in revenue mainly due to positive operating performance and favourable accomplishment of merger and integration goals.
BNY Mellon Corporation reports fourth quarter income from continuing operations, before an extraordinary item, and after preferred stock dividends, of $53 million, or $0.05 per common share. In the fourth quarter of 2008, net income applicable to common stock, including the impact of an extraordinary item, was $28 million, or $0.02 per common share.
Income from continuing operations, before an extraordinary item, and after preferred stock dividends, for the full-year 2008 totaled $1.409 billion, or $1.22 per common share. Net income applicable to common stock for the full-year 2008 totaled $1.386 billion, or $1.20 per common share, compared with $2.039 billion, or $2.18 per common share, for full-year 2007.
Fourth Quarter Highlights of The Bank of New York Mellon Corporation:
Total revenue was $2.886 billion, comprised of $1.816 billion of fee and other revenue and $1.070 billion of net interest revenue, and included a pre-tax charge for the write-down of certain investment securities ($1.241 billion) in total fee and other revenue.
Assets under custody and administration amounted to $20.2 trillion, a decrease of 13% compared with the prior year and a decrease of 10% (unannualized) sequentially, as the impact of new business converted during the fourth quarter was more than offset by lower market values and the impact of a stronger U.S. dollar.
Assets under management, excluding securities lending assets, amounted to $928 billion at quarter end. This represents a decrease of 17% compared with the prior year. Sequentially, assets under management decreased 13% (unannualized). Net asset inflows in the fourth quarter totaled $5 billion but were more than offset by lower market values and the impact of a stronger U.S. dollar.
Securities servicing fees totaled $1.458 billion, a decrease of 7% on a reported basis and approximately 3% adjusted for the sale of the B-Trade and G-Trade execution businesses in the first quarter of 2008. Securities servicing fees declined 5% (unannualized) sequentially.
Asset and wealth management fees totaled $657 million, a decline of 26% compared to the prior year and 17% (unannualized) sequentially reflecting the global weakness in market values. Performance fees totaled $44 million in the fourth quarter of 2008 compared to $62 million in the prior year and $3 million sequentially.
Foreign exchange and other trading activities totaled a record $510 million, an increase of 67% compared with $305 million in the prior year and an increase of 32% (unannualized) compared with $385 million in the third quarter of 2008.
Net interest revenue (FTE) totaled a $1.077 billion with a net interest margin of 2.34%. This compares with net interest revenue of $757 million and a net interest margin of 2.16% in the fourth quarter of 2007
Securities losses totaled $1.241 billion. This compares with a loss of $191 million in the fourth quarter of 2007 and a loss of $162 million in the third quarter of 2008. The increased level of losses reflects more negative market assumptions relating to the housing industry and the potential for future defaults.
The provision for credit losses was $60 million in the fourth quarter of 2008 compared with $20 million in the fourth quarter of 2007 and $30 million in the third quarter of 2008. During the fourth quarter of 2008, the total allowance for credit losses increased by $35 million and net charge-offs totaled $25 million.
“In an extraordinarily challenging year, we generated profits in every quarter, achieved revenue growth of 9%, gained share in our businesses, outperformed on the merger and integration goals and had top-ranked client service globally,” says Robert P. Kelly, chairman and chief executive officer, The Bank of New York Mellon.
“As we enter 2009, our business model works and we continue to maintain the capital strength needed in this uncertain market environment. I want to thank all of our employees, as our success is a reflection of their excellent work.”
“Our operating performance during the fourth quarter includes record revenue from our institutional servicing businesses and well-controlled operating expenses,” continues Robert P. Kelly. These results were offset by securities write-downs reflecting their deterioration and enormous liquidity discounts for mortgage-backed securities.”
“We believe that the actual incurred loss will ultimately be materially lower based on current assumptions. We should have the opportunity to earn back a substantial portion of the write-downs over the remaining lives of the securities.”
L.D.