What were the main drivers of BNY Mellon's revenue growth in Q3 2010?

Revenue growth was primarily driven by increases in fee and other revenue, specifically from securities servicing fees and asset and wealth management fees. This growth was significantly influenced by the recent acquisitions of Global Investment Servicing, Inc. (GIS) and BHF Asset Servicing GmbH (BAS), along with higher market values and net new business across various segments.

How did the acquisitions impact the company's financial performance?

The acquisitions of GIS and BAS significantly contributed to the growth in Assets Under Custody and Administration (AUC) and Assets Under Management (AUM). They also increased fee and other revenue and, consequently, noninterest expenses due to integration costs and associated operating expenses. The company expects these acquisitions to be accretive to earnings in 2010.

What is the company's outlook on interest rates and net interest revenue?

BNY Mellon noted that net interest revenue was stable year-over-year but the net interest margin (FTE) decreased to 1.67% compared to 1.85% in Q3 2009. This decline is attributed to higher average interest-earning assets in a lower interest rate environment. The company indicated that management strategies could mitigate some of the impact of interest rate changes.

How is BNY Mellon managing its capital and what are the key capital ratios?

BNY Mellon maintained a strong capital position. The Tier 1 capital ratio was 12.2% at September 30, 2010, a slight decrease from the previous quarter, primarily due to the impact of acquisitions, partially offset by an equity issuance and earnings retention. Other capital ratios, such as Total capital ratio (15.8%) and Tier 1 common equity to risk-weighted assets ratio (10.7%), also indicate a well-capitalized position.

BK/BK-PK 10-Q Quarterly Report Q3 FY2010 — Revenue, Net Income, EPS

Summary

The Bank of New York Mellon Corporation (BK) reported a net income of $622 million, or $0.51 per diluted share, for the third quarter of 2010. This represents a slight decrease from the $658 million ($0.54 per share) reported in the second quarter of 2010 but a significant improvement from the net loss of $2,458 million ($2.05 per share) in the third quarter of 2009. The company saw substantial growth in its core businesses, with Assets Under Custody and Administration (AUC) reaching a record $24.4 trillion and Assets Under Management (AUM) hitting $1.14 trillion. These increases were driven by strategic acquisitions, including Global Investment Servicing, Inc. (GIS) and BHF Asset Servicing GmbH (BAS), as well as favorable market conditions and net new business. BNY Mellon's fee and other revenue increased by 2% year-over-year to $2.67 billion, primarily due to higher securities servicing fees and asset and wealth management fees, reflecting the positive impact of acquisitions and improved market values. However, net interest revenue saw a slight sequential decrease, with the net interest margin (FTE) declining to 1.67% from 1.85% in the prior year, attributed to higher average interest-earning assets in a lower rate environment. The company's capital position remained strong, with a Tier 1 capital ratio of 12.2% at the end of the quarter.

Financial Highlights

37 data points

Beta

Revenue

$3.44B

Net Income

$622.00M

0.2% Net Margin

EPS (Diluted)

$0.51

Total Assets

$254.16B

Cash & Equivalents

$3.69B

Free Cash Flow

$2.99B

Financial Statements

Beta

Revenue	$3.44B
Operating Income	$1.89B
Interest Expense	$141.00M
Net Income	$622.00M
EPS (Basic)	$0.51
EPS (Diluted)	$0.51
Shares Outstanding (Basic)	1.21B
Shares Outstanding (Diluted)	1.21B

Key Highlights

1Net income for Q3 2010 was $622 million, or $0.51 per diluted share, a slight decrease from Q2 2010 but a significant improvement from a loss in Q3 2009.
2Assets Under Custody and Administration (AUC) reached a record $24.4 trillion, up 10% year-over-year, driven by acquisitions and market growth.
3Assets Under Management (AUM) grew to $1.14 trillion, an 18% increase year-over-year, reflecting acquisitions, market appreciation, and net new business.
4Fee and other revenue increased 2% year-over-year to $2.67 billion, boosted by securities servicing and asset/wealth management fees.
5Net interest revenue remained stable year-over-year at $718 million, though the net interest margin decreased due to a lower interest rate environment.
6Noninterest expense increased by 13% year-over-year to $2.61 billion, primarily due to the impact of acquisitions and higher litigation expenses.
7The Tier 1 capital ratio was 12.2% at quarter-end, reflecting the impact of acquisitions offset by equity issuance and earnings retention.

Bank of New York Mellon Corp Quarterly Report for Q3 Ended Sep 30, 2010

Summary

Financial Highlights

Key Highlights

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