BNY Mellon (BK) Q1 Earnings Top Estimates, Revenues Down Y/Y

Assets under custody and/or administration of $41.7 trillion grew 18.5% year over year, reflecting higher market values, net new business and the favorable impact of a weaker U.S. dollar.

Credit Quality: A Mixed Bag

As of Mar 31, 2021, non-performing assets were $112 million, up 27.3% year over year. Also, allowance for loan losses — as a percentage of total loans — was 0.54%, up 32 bps from the prior-year quarter.

However, in the reported quarter, the company recorded a provision benefit of $83 million against provision for credit losses of $169 million in the year-ago quarter.

Capital Ratios Worsen

As of Mar 31, 2021, the common equity Tier 1 ratio was 12.6% compared with 13.1% on Dec 31, 2020. Tier 1 Leverage ratio was 5.8%, down from 6.3% on Dec 31, 2020.

Our Viewpoint

BNY Mellon’s global reach, strong balance sheet position, and solid AUM balance will go a long way in supporting profitability. However, near-zero interest rates will likely continue to hurt margins in the near term.

The Bank of New York Mellon Corporation Price, Consensus and EPS Surprise

The Bank of New York Mellon Corporation Price, Consensus and EPS Surprise

The Bank of New York Mellon Corporation price-consensus-eps-surprise-chart | The Bank of New York Mellon Corporation Quote

Currently, BNY Mellon carries a Zacks Rank #3 (Hold). 

Earnings Schedule of Other Banks

KeyCorp (KEY Quick Quote KEY - Free Report) is scheduled to release results on Apr 20. SVB Financial Group (SIVB Quick Quote SIVB - Free Report) and East-West Bancorp (EWBC Quick Quote EWBC - Free Report) are scheduled to announce quarterly numbers on Apr 22.

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