BNY Mellon Troubles May Not Bleed Through to Peers, Goldman Says

(Bloomberg) -- Issues that sent Bank of New York Mellon tumbling 9.5 percent on Wednesday are likely firm-specific, and may pose less downside risk to consensus net interest income estimates for Northern Trust Corp. and State Street Corp., Goldman’s Alexander Blostein wrote in a note.

Blostein noted BNY Mellon’s first-quarter net interest income, or NII, miss “meaningfully lowered the starting point for NII going forward.” He thinks it’s unlikely Northern Trust and State Street will miss to a similar degree, as both firms provided updated NII guidance in March. He also sees differences “across balance sheet size, deposit mix and deposit pricing, which point to a more manageable forward outlook.”

Northern Trust and State Street are due to report April 23.

BNY Mellon shares fell the most on Wednesday since 2015 after 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.

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