By Dow Jones Business News, October 16, 2013, 07:15:00 AM EDT
By Ben Fox Rubin
Bank of New York Mellon Corp.'s ( BK ) third-quarter income rose 35% as the trust bank's fee revenue improved, though it
also benefited significantly from a recent tax court decision.
Results beat expectations.
Trust banks such as BNY Mellon act as custodians and servicers for corporations and Wall Street and earn most of their
money collecting fees for various servicing activities, such as safekeeping and accounting. They make fewer loans than
commercial banks and therefore invest more of their deposits in securities, which has hurt earnings in recent years
because of low bond yields.
BNY Mellon reported a profit of $980 million, up from $725 million a year earlier. Per-share earnings, which reflect
preferred dividends, rose to 82 cents from 61 cents. The company posted a $2 million benefit from income taxes, compared
with an expense of $225 million a year earlier. Excluding the benefit related to a U.S. tax court's partial
reconsideration of a tax decision, income was 60 cents a share in the latest period.
Revenue improved 2.5% to $3.77 billion, and total fee revenue was up 2.9% to $2.94 billion.
Analysts polled by Thomson Reuters had most recently forecast per-share earnings of 58 cents on revenue of $3.75
Assets under management rose 13% from a year earlier to $1.53 trillion as of the end of the quarter, while assets
under custody and administration grew 4% to $27.4 trillion.
Shares closed Tuesday at $30.85 and were inactive premarket. The stock is up 20% so far this year.
Write to Ben Fox Rubin at firstname.lastname@example.org
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