BNY Mellon sees asset servicing slide for Q3
16 October 2020 New York
Image: oyfotoliakid / Adobestock.com
BNY Mellon has revealed a total revenue of $3.8 billion for Q3 2020, a decrease of less than 1 percent compared to the same period last year, according to its Q3 report.
Of the total revenue, BNY Mellon’s asset servicing Q3 revenues dropped 4 percent from Q3 2019 with $1.3 billion.
BNY Mellon explained the year-over-year decrease primarily reflects lower interest rates, partially offset by higher client deposits and client volumes.
The asset servicing revenue for Q3 was also 7 percent lower than the previous quarter. BNY Mellon noted the sequential decrease primarily reflects lower foreign exchange volumes.
It also represents lower net interest revenue, a one-time fee recorded in Q2 2020 and lower securities lending revenue driven by tighter spreads.
For comparison, BNY Mellon’s asset servicing Q1 revenues came in at $1.5 billion, a 9 percent increase from year-end 2019.
BNY Mellon’s treasury services results for Q3 2020 saw a year-over-year increase of 4 percent ($323 million), which primarily reflects higher client deposits and money market balances.
The sequential decrease (5 percent) in treasury services reflects lower net interest revenue, partially offset by higher payment volumes.
Meanwhile, assets under custody and/or administration (AUC/A) of $38.6 trillion, increased 8 percent, primarily reflecting higher market values, net new business, higher client inflows and the favourable impact of a weaker US dollar.
Further key takeaways from the report showed total revenue for investment and wealth management increased 3 percent, income before taxes decreased 17 percent, driven by Q3 19 tax related reserve reduction, while assets under management of $2 trillion, increased 9 percent.
Discussing the results, the bank’s CEO Todd Gibbons, said: “While uncertainty lies ahead in terms of how the pandemic evolves and its impact on the global economy, I believe the underlying strength of our franchise will become more apparent next year, as we expect to have most of the run-rate impact of lower rates and associated money market fee waivers in our earnings.”
Of the total revenue, BNY Mellon’s asset servicing Q3 revenues dropped 4 percent from Q3 2019 with $1.3 billion.
BNY Mellon explained the year-over-year decrease primarily reflects lower interest rates, partially offset by higher client deposits and client volumes.
The asset servicing revenue for Q3 was also 7 percent lower than the previous quarter. BNY Mellon noted the sequential decrease primarily reflects lower foreign exchange volumes.
It also represents lower net interest revenue, a one-time fee recorded in Q2 2020 and lower securities lending revenue driven by tighter spreads.
For comparison, BNY Mellon’s asset servicing Q1 revenues came in at $1.5 billion, a 9 percent increase from year-end 2019.
BNY Mellon’s treasury services results for Q3 2020 saw a year-over-year increase of 4 percent ($323 million), which primarily reflects higher client deposits and money market balances.
The sequential decrease (5 percent) in treasury services reflects lower net interest revenue, partially offset by higher payment volumes.
Meanwhile, assets under custody and/or administration (AUC/A) of $38.6 trillion, increased 8 percent, primarily reflecting higher market values, net new business, higher client inflows and the favourable impact of a weaker US dollar.
Further key takeaways from the report showed total revenue for investment and wealth management increased 3 percent, income before taxes decreased 17 percent, driven by Q3 19 tax related reserve reduction, while assets under management of $2 trillion, increased 9 percent.
Discussing the results, the bank’s CEO Todd Gibbons, said: “While uncertainty lies ahead in terms of how the pandemic evolves and its impact on the global economy, I believe the underlying strength of our franchise will become more apparent next year, as we expect to have most of the run-rate impact of lower rates and associated money market fee waivers in our earnings.”
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