Bank of New York Mellon Corp. said on Wednesday its first-quarter profit declined slightly as its foreign exchange revenue slid 21 per cent from year-ago levels.
The world’s largest custody bank reported net income of $619-million (U.S.), or 52 cents a share, compared with $625-million, or 50 cents a share, a year earlier. That matched the average estimates of analysts.
BNY Mellon said foreign exchange revenue totaled $136-million in the first quarter, a decline of 21 per cent from the year-ago period and a 26-per-cent drop from the fourth quarter. The bank blamed lower volumes and less volatility for the year-to-year decline.
BNY Mellon’s forex business has been the subject of several lawsuits in which the bank has been accused of overcharging pension fund clients on trades. The bank has denied any wrongdoing.
Assets under custody and administration, a key driver of fees, totaled $26.6-trillion at the end of March, 4 per cent higher than the year-ago period.
The bank’s total fee revenue, which includes forex, service fees and investment management fees, dropped 1 percent to $2.8-billion. Fees were hurt by the sale of the bank’s shareowner services business in the fourth quarter.
Since the fourth quarter, the bank said it had to waive fewer fees related to its money market fund business. Money market fund sponsors have been waiving fees so investors can have some yield in a near-zero interest rate environment.
Net interest revenue, meanwhile, surged 10 per cent to $765-million as average client deposits increased $28-billion, or 73 per cent, from the year-ago period. But since the end of the fourth quarter, those deposits have declined $10-billion, or 13 per cent, as clients put more cash to work.