Bank of New York Mellon Corp (NYSE:BK) posts strong result

Bank of New York Mellon Corp (NYSE:BK) stock fell 4.08% (As on Jan 19, 11:18:45 AM UTC-4, Source: Google Finance) though the company posted better than expected results for the fourth quarter of 2021. Fee revenue increased 4% primarily reflecting the positive impact of higher market values and client volumes, partially offset by higher money market fee waivers. Excluding money market fee waivers, fee revenue increased 8%. Investment and other revenue increased primarily reflecting the 4Q20 losses on business sales. Net interest revenue decreased slightly primarily reflecting lower interest rates on interest-earning assets and the impact of hedging activities (primarily offset in fee and other revenue). This was partially offset by the benefit of lower funding and deposits rates and larger deposit and loan balances. AUC/A of $46.7 trillion, increased 14%, primarily reflecting net client inflows and higher market values, partially offset by the unfavorable impact of a stronger U.S. dollar. AUM was of $2.4 trillion, increased 10%, primarily reflecting higher market values and net inflows.

BK in the fourth quarter of 2021 has reported the adjusted earnings per share of $1.04, beating the analysts’ estimates for the adjusted earnings per share of $1.02, according to the Zacks Consensus Estimate. The company had reported the adjusted revenue growth of 4 percent to $4.02 billion in the fourth quarter of 2021, beating the analysts’ estimates for revenue by 0.96%.

Moreover, Securities Services’ total revenue increased 5%, income before taxes increased 63%; or 24% excluding notable items and pre-tax operating margin of 19%. Market and Wealth Services’ total revenue increased 1%, Income before taxes increased 4% and Pre-tax operating margin was of 43%. Investment and Wealth Management’ total revenue increased 3%, Income before taxes decreased 11% and pre-tax operating margin of 27%; adjusted pre-tax operating margin – Non-GAAP of 29%. Other Segment’s total revenue includes corporate treasury and other investment activity, including hedging activity which has an offsetting impact between fee and other revenue and net interest expense. The increase in total revenue year-overyear primarily reflects the 4Q20 losses on business sales.

During the fourth quarter, the company repurchased 22 million common shares for $1.2 billion; Dividends of $280 million to common shareholders (including dividend-equivalents on share-based awards). The return on common equity (“ROE”) was of 9%, Return on tangible common equity (“ROTCE”) of 17%,  Common Equity Tier 1 (“CET1”) ratio was 11.1%, Tier 1 leverage ratio was of 5.5%, Average liquidity coverage ratio (“LCR”) was of 109% and Total Loss Absorbing Capacity (“TLAC”) ratios exceed minimum requirements.

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