Asset servicing revenue dips for BNY Mellon’s Q4 2019
17 January 2020 New York
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BNY Mellon’s asset servicing revenue suffered a 2 percent dip in Q4 2019, representing a year-over-year decrease.
The decrease reflects lower net interest revenue and foreign exchange revenue, partially offset by the impact of higher equity markets, according to BNY Mellon.
The bank added that the sequential decrease primarily reflects lower net interest revenue.
Meanwhile, revenue in treasury services saw a slight increase and stood at $329 million in Q4 2019 compared to Q3 2019’s $312 million. In Q4 2018, treasury services revenue came in at $328 million.
BNY Mellon stated that year-over-year, higher payment fees were offset by lower net interest revenue, while the sequential increase primarily reflects higher net interest revenue and payment fees.
Clearance and collateral management revenue decreased from $293 million in Q3 2019 to $280 million in Q4 2019. However, this marked an increase compared to Q4 2018’s $278 million.
The year-over-year increase primarily reflects growth in collateral management and clearance volumes, which were mostly offset by lower net interest revenue.
BNY Mellon added that the sequential decrease in clearance and collateral management revenue primarily reflects lower client activity.
Further highlights from the report found that total revenue of $4.8 billion, increased 19 percent and decreased slightly excluding notable items.
Elsewhere, BNY Mellon revealed that fee revenue increased 26 percent; nearly all of the increase driven by the gain on sale of an equity investment.
BNY Mellon’s interim CEO Todd Gibbons commented: "In 2019, we continued to build the foundation for growth and the fourth quarter showed progress toward this goal. We recently announced additional partnerships that further our efforts to provide best-in-class services to our clients by opening our platform and combining our capabilities with industry leaders and innovative fintechs.”
Gibbons continued: “Expenses continued to be well managed as our investments to drive operating efficiencies are bearing fruit. Although we increased our technology spend by nearly 10 percent for the year, overall expenses were down. Additionally, we continue to deliver strong capital returns to shareholders, returning $4.4 billion in 2019 through share buybacks and dividends. In 2020, we plan to continue investing in technology to further enhance service quality, launch new capabilities, drive additional efficiencies and improve resilience.”
"We are also pleased to see that the efforts to drive operating excellence are not only reducing costs but enhancing quality, as measured by many of our clients. This helped deliver fee growth in many of the services businesses. Although we continue to be negatively impacted by lower rates, a flat yield curve and low foreign exchange volatility, we remain intensely focused on carefully managing costs and driving organic revenue growth," Gibbons concluded.
The decrease reflects lower net interest revenue and foreign exchange revenue, partially offset by the impact of higher equity markets, according to BNY Mellon.
The bank added that the sequential decrease primarily reflects lower net interest revenue.
Meanwhile, revenue in treasury services saw a slight increase and stood at $329 million in Q4 2019 compared to Q3 2019’s $312 million. In Q4 2018, treasury services revenue came in at $328 million.
BNY Mellon stated that year-over-year, higher payment fees were offset by lower net interest revenue, while the sequential increase primarily reflects higher net interest revenue and payment fees.
Clearance and collateral management revenue decreased from $293 million in Q3 2019 to $280 million in Q4 2019. However, this marked an increase compared to Q4 2018’s $278 million.
The year-over-year increase primarily reflects growth in collateral management and clearance volumes, which were mostly offset by lower net interest revenue.
BNY Mellon added that the sequential decrease in clearance and collateral management revenue primarily reflects lower client activity.
Further highlights from the report found that total revenue of $4.8 billion, increased 19 percent and decreased slightly excluding notable items.
Elsewhere, BNY Mellon revealed that fee revenue increased 26 percent; nearly all of the increase driven by the gain on sale of an equity investment.
BNY Mellon’s interim CEO Todd Gibbons commented: "In 2019, we continued to build the foundation for growth and the fourth quarter showed progress toward this goal. We recently announced additional partnerships that further our efforts to provide best-in-class services to our clients by opening our platform and combining our capabilities with industry leaders and innovative fintechs.”
Gibbons continued: “Expenses continued to be well managed as our investments to drive operating efficiencies are bearing fruit. Although we increased our technology spend by nearly 10 percent for the year, overall expenses were down. Additionally, we continue to deliver strong capital returns to shareholders, returning $4.4 billion in 2019 through share buybacks and dividends. In 2020, we plan to continue investing in technology to further enhance service quality, launch new capabilities, drive additional efficiencies and improve resilience.”
"We are also pleased to see that the efforts to drive operating excellence are not only reducing costs but enhancing quality, as measured by many of our clients. This helped deliver fee growth in many of the services businesses. Although we continue to be negatively impacted by lower rates, a flat yield curve and low foreign exchange volatility, we remain intensely focused on carefully managing costs and driving organic revenue growth," Gibbons concluded.
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