BNY Mellon Tumbles Most Since 2015; CEO Warns of Yield-Curve Woe
Bank of New York Mellon Tumbles; CEO Warns of Yield-Curve Pain
(Bloomberg) -- Bank of New York Mellon shares tumbled as much as 8.8 percent in early Wednesday trading, the most since August 2015. Earlier, the bank reported earnings per share, net interest margin and revenues that missed analysts’ expectations, and Chief Executive Officer Charlie Scharf warned the yield curve would hurt revenue for several quarters to come.
Weak revenue overwhelmed the bank’s management of expenses, Credit Suisse’s Susan Roth Katzke wrote in a note. Net interest income, or NII, and fees were both short of forecast, she said, adding that NII was hit by continued deposit run-off.
Katzke flagged Scharf’s press release remarks: “While the current expectations for the yield curve will likely negatively impact our revenue growth for the next several quarters,” he said, “we will remain disciplined on expenses and continue to build out capabilities, which should eventually enable stronger growth.”
Both net interest income and fees missed, Jefferies’s Ken Usdin wrote in a note, with NII “likely to remain subdued.” BNY Mellon’s “expense control remained solid, but operating leverage was absent,” he said, while asset servicing and management fees both missed.
Usdin expects most of the bank’s revenue trends may show up at Northern Trust Corp. and State Street Corp., both of which are due to report April 23. Northern Trust fell as much as 3.8 percent, and State Street dropped as much as 3.8 percent.
To contact the reporter on this story: Felice Maranz in New York at fmaranz@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Courtney Dentch
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