Bank of New York Mellon
continues to benefit from an environment of higher interest rates, with the bank being the latest lender to beat earnings expectations amid a surge in net interest revenue.
BNY Mellon (ticker: BK) reported earnings of $1.22 a share on revenue of $4.4 billion in the third quarter. The company was expected to report earnings of $1.15 a share on revenue of $4.3 billion, based on estimates of analysts surveyed by FactSet.
Shares in the bank advanced 0.5% in premarket trading on Tuesday, paring gains after the stock initially jumped more than 2%.
“Our financial results once again highlight the efficacy of our prudent and proactive asset- and liability-management,” said Robin Vince, the group’s president and CEO. “Amid a rapidly evolving operating environment, we continued to deliver attractive profitability and capital returns to our shareholders while further strengthening our regulatory capital and liquidity ratios.”
BNY Mellon is not a conventional bank, instead focusing on investment services such as custody, where it is a dominant custodian for trillions of dollars of assets for clients. Yet lending remains a core profit driver—and, just as with JPMorgan Chase and Bank of America, higher interest rates have been a tailwind again this quarter.
Net interest revenue at BNY Mellon surged 10% from a year ago, reflecting increased profitability from lending amid the highest interest rates in a generation. When interest rates are higher, banks tend to have greater margins on their lending business, with a wider gap between what lenders pay on deposits and charge on loans.
Write to Jack Denton at [email protected]
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