BNY Mellon first quarter 2021 profits dip but beat expectations
12:27, 16 April 2021
BNY Mellon reported net earnings of $858m (£621m) for the first quarter of 2021, which is 9% down on the same quarter last year. While the numbers beat expectations, revenue slipped 5% to $3.92bn. Net interest income was also down by 20% at $655m.
Chief executive Todd Gibbons reported a 1% increase in fee revenues, including “strong” organic growth driven, he said, by new business and higher economic activity generally.
Share repurchases commence
The bank’s operating margin was flat at 29% compared to the first quarter of 2020 when the operation “saw exceptional pandemic-related volumes and volatility,” according to Gibbons. The CEO also confirmed that share repurchases commenced in the first quarter. BNY Mellon bought 16.8 million common shares for $699m.
He added: “As we move from a period of resilience to a period of recovery and growth, there is a confluence of factors that are encouraging indicators for economic momentum. This includes progress on vaccine deployment, extraordinary levels of consumer savings, and monetary stimulus and further government spending – all of which are likely to accelerate GDP growth.”
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Assets under management boosted
BNY Mellon’s latest total revenues ($3.92bn) were a little ahead of the Zacks Consensus Estimate ($3.84bn). Assets under management (AUM) climbed more than 22% to $2.2tn for BNY Mellon. It has a strong balance sheet and solid AUM position, but most banks continue to struggle against close-to-zero interest rates. US large banks are highly exposed to the ‘real economy’.
But that means they are also exposed to a slew of increased COVID-19 linked consumer savings as well as new government-led stimulus packages.
Read more: Bank of America beats forecasts with .1bn Q1 profit
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