BNY Mellon explains that the YoY decrease includes lower interest rates and foreign exchange revenue and higher money market fee waivers, partially offset by higher client volumes and market values.
Pershing, issuer services, treasury services, and clearance and collateral management all saw a YoY revenue decrease.
BNY Mellon says the decrease in Pershing revenues primarily reflects the impact of money market fee waivers and a one-time fee recorded in Q1 2020, partially offset by higher market values and client volumes.
For clearance and collateral management, the decrease primarily reflects lower interest rates and intraday credit fees, while the sequential increase primarily reflects higher clearance volumes.
The decline in revenues for issuer services decline reflects lower interest rates and higher money market fee waivers in Corporate Trust and lower Depositary Receipts revenue, according to BNY Mellon, while the decrease in treasury services revenues reflects lower interest rates and higher money market fee waivers.
Although revenues were on the decline, the Q1 earnings also showed assets under custody/administration (AUC/A) of $41.7 trillion increased 18 per cent.
BNY Mellon says the increase reflects higher market values, net new business and the favourable impact of a weaker US dollar.
Assets under management (AUM) of $2.2 trillion, increased 23 per cent, which was down to higher market values, the favourable impact of a weaker US dollar (principally versus the British pound) and net inflows.
Commenting on the overall results, Todd Gibbons, CEO of BNY Mellon, says: “We delivered a strong quarter and continue to see momentum across our businesses, despite the ongoing impact of low interest rates. In Q1 2021, on a year-over-year basis, we delivered a 1 per cent increase in fee revenue, or 6 per cent excluding the impact of money market fee waivers. This included strong organic growth driven by new business and higher activity levels.”
“Our business model has proven to be resilient and operating margin was essentially flat at 29 per cent, compared to Q1 2020 when we saw exceptional pandemic-related volumes and volatility.”
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