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April 19, 2012 at 12:22 PM
In the first quarter of 2012, higher clearing services fees in the Bank of New York Mellon unit that includes the custody business for registered investment advisors helped BNY Mellon offset lower trading volumes versus a year ago, including a 21% drop in foreign-exchange trading as the bank fights a number of forex lawsuits.
Fees for BNY Mellon’s (BK) Clearing Service unit, which includes Pershing Advisor Services’ (PAS) RIA custody business, totaled $303 million in Q1 compared with $292 million at this time a year ago, up 4%, and $278 million in the first quarter of 2011, up 9%, the bank reported Wednesday.
Pershing’s year-over-year increase was driven by new business and growth in mutual fund assets and retirement accounts, but was partially offset by lower trading volumes and higher money market fee waivers, according to BNY Mellon’s quarterly earnings review. The increase over last quarter reflected higher trading volumes and growth in mutual fund assets, the bank said.
Over all, BNY Mellon reported first-quarter 2012 profits of $619 million, or $0.52 per share, versus $625 million, or $0.50 per share, in Q1 2011 and $505 million, or $0.42 per share, in Q4 2011.
BNY Mellon’s profits were nipped by allegations that it overcharged clients for currency trades, The Wall Street Journal on Thursday reported analysts as saying.
Along with State Street Corp., which also this week reported lower quarterly foreign-exchange revenue, BNY Mellon is battling law-enforcement probes examining whether “they allegedly defrauded investors by systematically overcharging them on currency trades,” according to the Journal, which reported that both banks deny wrongdoing.
