BNY Mellon ended last year with a down quarter for its asset servicing business, while also recording a decline in assets under custody (AUC).
The world’s largest global custodian, recorded a year-on-year decline of 2% for its asset servicing business in the fourth quarter 2018 with revenues of just over $1.4 billion, while AUC also fell 1% to $33.1 trillion.
BNY Mellon attributed the fall in revenue to “lower client assets and activity and the unfavourable impact of a stronger US dollar.”
Meanwhile the decline in AUC reflected “lower market values”, as well as the impact of the US dollar.
“The underlying performance of our businesses was mixed as our revenue declined, but we continued to maintain strong expense discipline,” said Charles Scharf, chairman and CEO, BNY Mellon.
Total investment services revenues, which includes revenues from asset servicing, Pershing and clearing and collateral management businesses, increased 3% over the year to $3 billion.
Nevertheless, full year revenues from the asset servicing business reached over $4.6 billion, up 5% in comparison to the full year of 2017.
“As we look forward, we are cautious regarding how the economic and market environment will impact our business in 2019,” said Scharf.
“We will remain keenly focused on managing our expense base. Our ongoing drive toward efficiency will allow us to continue to increase our investment in technology and infrastructure without meaningfully impacting the total cost base.”
JP Morgan and Citi also released their fourth quarter results earlier this week, with the two banks recording revenues of $1 billion and $653 million respectively for their securities services businesses, up 1% and 7% for each.