Bank of New York Mellon Corp (NYSE: BK) stock rose over 1.9% on 16th July, 2021 (as of 13:25:41 UTC-4 · USD; Source: Google finance) after the company posted better than expected results for the second quarter of FY 21. Fee revenue grew 4% mainly due to the positive impact of higher markets, the favorable impact of a weaker U.S. dollar and higher client volumes, partially offset by money market fee waivers. Excluding money market fee waivers, fee revenue increased 10%. Other revenue declined mainly due to lower gains related to seed capital investments. Net interest revenue declined 17% mainly due to lower interest rates on interest-earning assets. This was partially offset by the benefit of lower funding and deposit rates, lower debt balances, a larger securities portfolio and higher deposit balances. The noninterest expense rose 3% primarily due to the unfavorable impact of a weaker U.S. dollar, investments in efficiency and growth initiatives and higher revenue-related expenses.
Moreover, Assets under custody and/or administration (“AUC/A”) of $45.0 trillion, increased 21%, primarily reflecting higher market values, net new business and the favorable impact of a weaker U.S. dollar. Assets under management (AUM) of $2.3 trillion, increased 18%, primarily reflecting higher market values, the favorable impact of a weaker U.S. dollar (principally versus the British pound) and net inflows.
BK in the second quarter of FY 21 has reported the adjusted earnings per share of $1.13, beating the analysts’ estimates for the adjusted earnings per share of $1.02, according to the Zacks Consensus Estimate. The company had reported 1 percent fall in the adjusted revenue growth to $3.96 billion in the second quarter of FY 21, beating the analysts’ estimates for revenue by 1.24%. Investment Services’ total revenue declined 4% and Investment and Wealth Management’s total revenue grew 13% during the second quarter.
Additionally, during the second quarter, the company has repurchased 12.8 million common shares for $618 million. The company has paid dividends of $273 million to common shareholders (including dividend-equivalents on share-based awards). The company has authorized to repurchase up to $6.0 billion of common shares through 4Q22 and increased quarterly dividend 10% to $0.34 per common share in 3Q21. The company posted return on common equity (ROE) of 10% and Return on tangible common equity (ROTCE) of 19%. The company’s Common Equity Tier 1 (CET1) ratio is 12.6%, Tier 1 leverage ratio of 6.0% and Average liquidity coverage ratio (LCR) of 110%.