BNY Mellon Raises Credit Losses Provision On Macroeconomic Factors, Reports Mixed Q1 Performance

• Bank of New York Mellon (NYSE: BK) clocked a first-quarter revenue increase of 11% year-over-year to $4.36 billion, almost in line with the consensus of $4.40 billion.

• Total fee and other revenue inched up by 0.2% to $3.24 billion. Net interest revenue jumped 61.6% to $1.13 billion, primarily reflecting higher interest rates on interest-earning assets, partially offset by higher funding expenses.

• Provision for credit losses was $27 million, significantly higher than $2 million in the year-ago period. Higher credit losses primarily reflected changes in the macroeconomic forecast.

• The pre-tax operating margin stood at 28%, compared with 23% in the year-ago period.

• Net income applicable to common shareholders jumped 29.5% to $905 million, while adjusted diluted earnings per common share totaled $1.13, beating the consensus estimate of $1.12. Adjusted earnings soared 31.4% Y/Y.

• The financial enterprise’s assets under management totaled $1.9 trillion, down by 16% Y/Y. The downside reflected lower market values, the unfavorable impact of a stronger U.S. dollar, and the divestiture of Alcentra, partially offset by net inflows.

• The bank declared a quarterly common stock dividend of $0.37 per share, payable on May 11, 2023, to shareholders of record as of the close of business on April 28, 2023.

• “The strength of BNY Mellon’s highly liquid, lower credit-risk and well-capitalized balance sheet in combination with the resilience of our platforms is the bedrock that supports our client franchise,” President and Chief Executive Officer Robin Vince added.

• Price Action: BK shares are trading lower by 0.97% at $43.80 during the premarket session on the last check Tuesday.

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