BNY Mellon’s assets under custody and/or administration (AuC/A) reached $27.6 trillion at the end of Q4 2013, a 5% increase over the previous year and a 1% gain over the previous quarter, due to a combination of higher market values and net new business.
For investment services, which includes asset servicing, clearing services, issuer services and treasury services, total fees reached $1.68 billion for the quarter, a 5% gain year over year but a drop of 3% from the previous quarter. The year-over-year gain reflects gains across the board, but the drop from the third quarter primarily reflects lower depositary receipts revenue.
In particular, asset servicing fees were $984 million, an increase of 4% year over year and 2% over the previous quarter, due to higher market values, organic growth and higher collateral management fees in Global Collateral Services. BNY Mellon’s estimated asset servicing new business wins reached $123 billion in AuC/A for the quarter, compared to $110 billion the previous quarter and $190 billion in Q4 2012. Within asset servicing, securities lending revenue fell due to lower spreads, measuring $21 million for the quarter compared to $26 million in Q3 2013 and $31 million in Q4 2012—a 19% drop from quarter to quarter and a 32% drop year over year.
Clearing services had strong gains, with fees reaching $324 million in Q4 2013 compared with $294 million in Q4 2012 (a 10% gain) and $315 million in Q3 2013 (a 3% gain). “The year-over-year increase was driven by higher mutual fund fees, asset-based fees and volumes, partially offset by higher money market fee waivers,” the bank said in its earning report. “The sequential increase was primarily driven by higher clearing revenue and mutual funds fees.”
For issuer services, fees were up 10% year over year to $237 million, but this was also a 26% drop from the previous quarter. “The year-over-year increase primarily reflects higher depositary receipts revenue due to corporate actions, partially offset by the continued run-off of high margin securitizations in Corporate Trust. The sequential decrease primarily resulted from seasonally lower depositary receipts revenue,” the bank said. At the end of 2013, BNY Mellon sponsored 1,335 depositary receipts programs, a 1% drop from the previous quarter and a 3% decrease year over year.
The bank’s total revenue measured $3.6 billion for the quarter, a 1% drop from the previous quarter and a 4% gain year over year. In preparation for Basel III, the bank also raised its total Tier 1 common equity ratio from 10.1% last quarter to 10.6% in Q4 2013.
BNY Mellon also said that it achieved its goal of reaching operational savings between $650-700 million by 2015; the bank achieved savings of $716 million on a run-rate basis in Q4 2013. The savings occurred through a combination of measures such as business restructuring in Investment Services, back-office operations consolidations for Dreyfus (the bank’s mutual fund management subsidiary), insourcing third-party contract developers to their global delivery centers, optimizing internal technology platforms and consolidating office space.
BNY Mellon Increases AuC by 5% in 2013
BNY Mellon’s assets under custody and/or administration (AuC/A) reached $27.6 trillion at the end of Q4 2013, a 5% increase over the previous year and a 1% gain over the previous quarter, due to a combination of higher market values and net new business.