BNY Mellon Revises Q4 Earnings, Sets Aside $598 Million in Legal Costs

BNY Mellon has revised its earnings for the fourth quarter of last year to include additional after-tax legal expenses of $598 million, in anticipation of a settlement with regulators over foreign exchange-related actions.
By Joe Parsons(2147488729)
BNY Mellon has revised its earnings for the fourth quarter of last year to include additional after-tax legal expenses of $598 million, in anticipation of a settlement with regulators over foreign exchange-related actions.

As a result, it reported an adjusted net income in the fourth quarter of $209 million, or 18 cents a share, down from $807 million, or 70 cents a share, it previously stated in January.

The adjustment also cuts its yearly net income by a fifth to $2.5 billion, suggesting a settlement with U.S. regulators is on the horizon.

Beginning in 2009, government authorities have been investigating BNY Mellon’s standing instruction FX transactions in connections with custody services it provides to public pension funds.

In 2011, the Department of Justice and New York’s Attorney General filled a separate civil lawsuits alleging that the bank fraudulently overcharged clients for FX transactions, with the latter filling a $2 billion lawsuit.

BNY Mellon has also been named as a defendant in several putative class action federal lawsuits filled in 2011, 2012 and 2014.

Other big banks including HSBC, Barclays, RBS and UBS disclosed legal reserves related to FX produces during their quarterly releases.

«