A poor performance in securities lending weighed down BNY Mellon’s asset servicing revenues in the second quarter, as the bank reported a second consecutive decline for the business.
Total asset servicing revenues declined 8% year-on-year to $1.4 billion, in which lower foreign exchange and securities lending revenues, as wells as lower client activity, impacted BNY Mellon’s main business division.
Securities lending revenues dropped by over a quarter from the same period in the previous year to $40 million, while FX and other trading revenues fell 11% year-on-year to $153 million.
The decline means another disappointing quarter for the world’s largest global custodian’s asset servicing business, after it saw revenues fall 7% year-on-year in the first quarter.
“Market conditions drove a decline in foreign exchange and securities lending activities within asset servicing,” said Charlie Scharf, chairman and CEO. BNY Mellon.
“However, we saw fee growth in issuer services, clearance and collateral management and Pershing.”
Clearing and collateral management revenues increased 6% to $284 million and the Pershing business grew moderately by 1% to $564 million.
Assets under custody, meanwhile, were up 6% to $35.5 trillion, which the bank attributed to a result of higher market values and net new business.
One of its more significant custody mandate wins over the period was with Denmark’s Arbejdsmarkedets Tillægspension (ATP), one of Europe’s largest pension funds with over $100 billion of assets, as well as with Microsoft’s treasury group which manages $130 billion in assets.