BNY (NYSE:BNY) reported stronger-than-expected second-quarter results after higher fee income and net interest income drove double-digit revenue growth. Despite the earnings beat, the financial services company’s shares edged lower in premarket trading.
Earnings and revenue top forecasts
The company posted adjusted earnings per share of 2.45 dollars for the second quarter, exceeding analysts’ consensus estimate of 2.23 dollars.
Revenue increased to 5.7 billion dollars, ahead of the expected 5.39 billion dollars and up 13 percent from the same period a year earlier.
Following the results, BNY shares slipped around 0.4 percent in premarket trading.
Fee income and net interest income strengthen
Fee revenue climbed 11 percent year on year to 4.0 billion dollars, supported by new business wins, higher market valuations and increased levels of client activity.
Net interest income rose 20 percent to 1.4 billion dollars as the company benefited from reinvesting securities at higher yields and continued balance sheet growth.
Chief Executive Officer Robin Vince said:
“In a dynamic market, BNY delivered another strong quarter with robust organic growth, once again demonstrating BNY’s position at the heart of the world’s capital markets.”
Profitability and assets continue to grow
BNY reported a pre-tax operating margin of 39.8 percent, up from 36.6 percent in the second quarter of last year.
Return on tangible common equity improved to 31.3 percent.
Assets under custody and administration increased 12 percent year on year to 62.6 trillion dollars, while assets under management rose 6 percent to 2.2 trillion dollars.
Capital returns remain robust
During the quarter, BNY returned 1.5 billion dollars to shareholders, including 371 million dollars in dividends and 1.1 billion dollars through share repurchases.
The company’s Common Equity Tier 1 capital ratio stood at 11.0 percent at the end of the period.
Noninterest expenses increased 7 percent to 3.4 billion dollars, reflecting higher revenue-related costs, continued investment in the business and increased employee compensation. These increases were partially offset by ongoing efficiency initiatives.
Bank of New York Mellon Corporation stock price
