BNY Mellon: asset servicing faces pricing pressure
27 March 2019 New York
Image: Shutterstock
BNY Mellon’s asset services business faces continued pricing pressure for its traditional custody and administration services, according to the bank’s 2018 Annual report.
BNY Mellon noted that they have significant scale benefits that they continue to realise and are making investments to provide data management solutions to expand their servicing of exchange-traded funds (ETFs) and alternative asset classes.
According to the report, they are building out their capabilities in higher-growth products, including alternatives and ETFs.
In addition, BNY Mellon is enhancing real-time intraday reporting and providing data analytics to help clients better manage their cash, manage risk and increase distribution.
Meanwhile, for a fee and other revenue, asset servicing for last year saw a 5 percent increase compared to the year prior.
BNY Mellon explained that the increase primarily reflects higher asset servicing fees, investment and other income, issuer servicing fees and investment management and performance fees, partially offset by net securities losses.
In terms of revenue, asset servicing saw mid-single-digit revenue growth. Assets under custody and/or administration decreased by 1 percent as the negative impact of market declines and the stronger US dollar were partially offset by new business.
Compared to 2017, asset servicing revenue of $5.9 billion increased 6 percent, which is reflected by higher net interest revenue and higher foreign exchange, the report found.
Additionally, this was also reflected by higher securities lending volumes, higher equity market values, and the favourable impact of a weaker US dollar, BNY Mellon highlighted.
BNY Mellon noted that they have significant scale benefits that they continue to realise and are making investments to provide data management solutions to expand their servicing of exchange-traded funds (ETFs) and alternative asset classes.
According to the report, they are building out their capabilities in higher-growth products, including alternatives and ETFs.
In addition, BNY Mellon is enhancing real-time intraday reporting and providing data analytics to help clients better manage their cash, manage risk and increase distribution.
Meanwhile, for a fee and other revenue, asset servicing for last year saw a 5 percent increase compared to the year prior.
BNY Mellon explained that the increase primarily reflects higher asset servicing fees, investment and other income, issuer servicing fees and investment management and performance fees, partially offset by net securities losses.
In terms of revenue, asset servicing saw mid-single-digit revenue growth. Assets under custody and/or administration decreased by 1 percent as the negative impact of market declines and the stronger US dollar were partially offset by new business.
Compared to 2017, asset servicing revenue of $5.9 billion increased 6 percent, which is reflected by higher net interest revenue and higher foreign exchange, the report found.
Additionally, this was also reflected by higher securities lending volumes, higher equity market values, and the favourable impact of a weaker US dollar, BNY Mellon highlighted.
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