BNY Mellon saw slower growth in its investment services revenues in the second quarter, largely due to nearly flat revenues in asset servicing.
Its asset servicing, Pershing, and other investment services businesses recorded revenues of $3.1 billion in the three months ending June, up 8% year-on-year but relatively flat over the previous quarter.
Fees from asset servicing again benefited from a weaker US dollar, as well as higher foreign exchange and securities lending volumes, and better equity market values.
Revenues for Pershing, BNY Mellon’s broker-dealer, declined 4% over the quarter to $558 million, and increased only moderately by 2%, as a result of lower clearing revenues.
“While we continued to benefit from the positive impact of higher interest rates and equity markets, albeit at a more modest pace than last quarter, we again saw some underlying franchise growth. Overall, the company remains strong, with some areas performing better than others,” said Charles Scharf, chairman and chief executive officer, BNY Mellon
Expenses for the investment services business also increased 1% over the quarter to nearly $2 billion, largely as a result of increased spending in technology.
Earlier this year, Scharf explained how the bank would increase its technology spending by $300 million in 2018, taking its tech budget to $2.7 billion.
Around three quarters of the increased budget will be spent on BNY Mellon’s operating platform and on cyber security.