State Street, Bank of New York Mellon Report Declining Profit
October 16 2020 - 9:23AM
Dow Jones News
By Logan Moore
Custodian banks State Street Corp. and Bank of New York Mellon
Corp. grew assets under management while experiencing
low-to-single-digit declines in profit and revenue, the companies
reported Friday morning.
Total revenue for BNY Mellon was $3.8 billion for the quarter
ended Sept. 30, a decrease of 0.4% compared with the same quarter
last year. The bank grew its assets under management by 8.5% to $2
trillion but its profit dropped 9.3% to $944 million.
"I believe the underlying strength of our franchise will become
more apparent next year, as we expect to have most of the run-rate
impact of lower rates associated with money market fee waivers in
our earnings," said Chief Executive Officer Todd Gibbons in a
release.
State Street Corp. reported an increase in assets under
management of 6.6% in the third-quarter to $3.1 trillion.
Total revenue for State Street fell 4% to $2.8 billion. Profits
were down almost 4.8% to $555 million from $583 million.
"Though persistent low rates depressed net interest income
during the quarter, deposit levels remain strong, allowing us to
lend more to our clients and reinvest in our investment portfolio,"
said Ron O'Hanley, chairman and chief executive officer, in a
release.
Even before the pandemic, custodial banks struggled with low
interest rates and their impact on interest-earning assets.
Those rates are likely to remain low for the long term. Last
month, the Federal Reserve said it would keep rates near zero until
the labor market improves and inflation hits 2%.
Bank of New York Mellon Corp. said it set aside $9 million for
credit losses.
(END) Dow Jones Newswires
October 16, 2020 09:08 ET (13:08 GMT)
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