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Wednesday, January 18, 2006 07:28 ET
NEW YORK, Jan 18, 2006 (BUSINESS WIRE) -- The Bank of New York Company, Inc. (NYSE: BK) reported today fourth quarter net income of $405 million compared with $351 million in the year-ago quarter and diluted earnings per share of 53 cents, up 18% over the 45 cents earned in the fourth quarter of 2004. Third quarter 2005 earnings were $389 million and 51 cents. Full-year 2005 net income was $1,571 million compared to $1,440 million in 2004 while diluted earnings per share was up 10% to $2.03 from $1.85 in 2004. Reported EPS reflects a reduction of 3 cents for the fourth quarter 2004 and full-year 2004 due to items detailed in Note 1.
Performance Highlights
-- Positive core operating leverage over year-ago and sequential quarters. See Note 4.
-- Securities servicing fees up 10% versus the year-ago quarter and on a full-year basis. The growth was led by strong performance in investor, issuer and broker-dealer services.
-- Strong net interest income, driven by the Company's sound interest rate positioning and strong liquidity generated by its core servicing businesses.
-- Foreign exchange and other trading revenues up 10% from the year-ago quarter.
-- Private client services and asset management revenues were up 10% from the year-ago quarter.
Chairman and Chief Executive Officer Thomas A. Renyi stated, "Our fourth quarter and full-year results reflect the accelerating earnings power of our franchise. We are achieving double-digit revenue growth in many of our key business lines and are positioned to generate positive operating leverage on a consistent basis - a primary goal for us.
"We have good momentum entering 2006 and continue to position our Company for long-term growth and success. During 2005 we formed strategic alliances to penetrate faster-growing markets in France, Germany, the Nordic and Baltic region, Japan, Australia, and India. We also continued to expand our market presence in high-growth areas such as hedge fund servicing and collateral management, while extending our capabilities in the rapidly growing area of alternative investments. Through these initiatives, our strengthened marketing programs, and the gains we are making in service quality and client-focused technology, we will create new growth opportunities in the year ahead."
SECURITIES SERVICING FEES
Percent Inc/(Dec) Year-to-date Percent
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4Q05 vs. 4Q05 vs. Inc/
(In millions) 4Q05 3Q05 4Q04 3Q05 4Q04 2005 2004 (Dec)
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Execution and
Clearing
Services $321 $314 $301 2% 7% $1,222 $1,145 7%
Investor Services 265 265 240 - 10 1,060 924 15
Issuer Services 171 170 150 1 14 639 583 10
Broker-Dealer
Services 58 57 50 2 16 227 205 11
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Securities
Servicing Fees $815 $806 $741 1 10 $3,148 $2,857 10
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Double-digit securities servicing fee growth over the fourth quarter and full-year 2004 periods reflects solid growth across all businesses. On a sequential-quarter basis, fees were marginally higher, reflecting modest growth in execution & clearing, issuer services, and broker-dealer services.
Execution and clearing fees increased from both the fourth quarter and full-year 2004, reflecting organic growth at Pershing and in the execution businesses as well as the additional revenues from the LJR acquisition. Pershing's revenues were up on a sequential basis, while the execution business also improved reflecting higher activity levels and continued strength in transition management. The execution and clearing businesses include institutional agency brokerage, electronic trading, transition management services, independent research and, through Pershing, correspondent clearing services such as clearing, execution, financing, and custody for introducing broker-dealers.
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