BNY Mellon has reported a year-over-year (YoY) decrease on its asset servicing revenue, which the bank said reflects lower interest rates and higher money market fee waivers, partially offset by higher market values and foreign exchange volumes and volatility.
The bank’s Q4 2020 earnings showed asset servicing revenue totalled $1.4 billion, representing a 4 per cent decrease on 2019’s Q4 figure.
Pershing, issuer services, treasury services, and clearance and collateral management all saw a YoY revenue decrease.
BNY Mellon explains that Pershing revenue decrease primarily reflects the impact of money market fee waivers, partially offset by higher clearing revenue, higher balances and the positive impact of equity markets.
The issuer services decrease reflects lower interest rates and higher money market fee waivers in corporate trust, while the revenue drop in treasury services reflects lower interest rates, including higher money market fee waivers, partially offset by higher client deposits, payment fees and money market balances.
The year-over-year decrease within clearance and collateral management primarily reflects lower investment income due to the Q4 2019 sale of an equity investment and lower intraday credit fees, partially offset by growth in non-US collateral management.
The bank reported assets under custody/administration (AUC/A) increased 11 per cent YoY to $41.1 trillion, which BNY Mellon said was due to higher market values and client inflows, the favourable impact of a weaker US dollar and net new business.
AUC/A also increased from the previous quarter by 6 per cent from $38.6 trillion.
It also saw a 15 per cent increase YoY in assets under management (AUM) to $2.2 trillion. BNY Mellon said the increase reflected higher market values, net inflows and the favourable impact of a weaker US dollar — principally versus the British pound.
Todd Gibbons, CEO of BNY Mellon, says: “During 2020, our business and operational resilience, enhanced by our technology and digital capabilities, enabled us to rapidly support our clients, employees and the financial system through immense stress and volatility.”
He adds: “At the same time, we continued to advance our strategic priorities and longer-term growth agenda across all of our businesses. The investments we’ve made over the past several years, especially in technology and operations, served us and our clients well amid some difficult circumstances, and I want to thank our employees for their extraordinary efforts in supporting our clients during an unprecedented year.”
Gibbons explains that while the full-year impact of low interest rates will be a “significant headwind” in 2021, BNY Mellon ended the year with momentum in its core franchise.
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