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WSJ: Bank of New York Mellon Earnings Soar

JULY 20, 2010, 7:59 A.M. ET
By TESS STYNES

Bank of New York Mellon Corp.'s second-quarter earnings nearly quadrupled as the financial-services company recovers from prior-year securities losses and TARP-related charges.

The asset manager and securities adviser has been expanding its wealth-management business and in June unveiled plans for a unit that will handle futures and swap trades by major customers. The moves come as financial-services firms seek to tap into investors' appetite for clearing transactions and in anticipation of regulatory changes regarding collateral requirements in the U.S. and Europe.

The firm reported a profit of $658 million, or 54 cents a share, matching analysts' expectations, according to Thomson Reuters, up from $176 million, or 15 cents a share, a year earlier. The prior year included a $236 million charge related to the repayment of $3 billion it received from Treasury's Trouble Asset Relief Program. Meanwhile, the latest quarter has $13 million of net securities gains, compared with prior-year losses of $256 million.

Fee revenue rose 1.8% to $2.56 billion as net interest revenue rose 3.1% to $722 million. on revenue of $3.34 billion.

Assets under management rose 19% on year to $1.047 trillion as of June 30 but fell 5.2% during the quarter amid declines in the stock market. Net inflows were $12 billion in the quarter

Credit-loss provisions tumbled to $20 million from $61 million a year earlier and $35 million in the first quarter. Nonperforming assets fell 12% to $406 million during the quarter.

Formed in July 2007 when Bank of New York acquired Mellon Financial Corp., the company is a "custodial bank," which generally holds investments and securities for other investors.

Write to Tess Stynes at [e-mail]

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