Shares of Bank of New York Mellon Corp. (BK) gained modestly in Friday’s pre-market trading after the bank reported strong Q3 results. The bank’s adjusted earnings surged by 20% year-over-year to $1.52 per share, beating the consensus estimate of $1.41 per share.
BNY’s Q3 Revenues Rise on Higher Asset Servicing Fees
BNY’s Q3 revenues increased by 5% year-over-year to $4.6 billion in the third quarter, above analysts’ expectations of $4.5 billion. The bank’s revenues were driven by its fee-based revenues, which increased 5% year-over-year to $3.4 billion. The rise in fee-based revenues was due to the acquisition of new clients and a market rally that increased the value of the bank’s assets under custody. The asset servicing fee represents the fee charged to BNY clients for services provided on the asset volume under its custody.
Furthermore, the bank’s assets under custody and administration reached $52.1 trillion, representing growth of 14% year-over-year.
BNY’s Net Interest Income Rose 3% in Q3
In a further boost for BNY, its net interest income (NII) rose 3% year-over-year to $1.05 billion. This increase was largely due to higher yields from BNY’s bond investments, which offset the rising cost of deposits.
Is BK Stock a Good Buy?
Wall Street Analysts remain cautiously optimistic about BK stock, with a Moderate Buy consensus rating based on 11 Buys and five Holds. Over the past year, BK stock has surged by more than 80%, and the average BK price target of $75.13 approximates the current trading level. Some of these analyst ratings are likely to change following BK’s results today.
