Bank N.Y. Mellon profit ex-items tops expectations
Bank of New York Mellon Corp reported a third-quarter net loss amid higher loan loss provisions, but earnings excluding one-time items topped expectations.
The world’s largest trust bank said on Tuesday it lost a net $2.5 billion, or $2.05 per share, in the quarter, compared with earnings of $303 million, or 26 cents a share, a year earlier.
Excluding investment securities losses and other special items, the company earned 54 cents per share. On that basis, analysts had forecast 48 cents, according to Thomson Reuters I/B/E/S.
Revenue, excluding securities losses, rose to 3.3 billion from $3.2 billion. Provisions for credit losses jumped to $147 million from $23 million.
The bank’s shares were at $28.00 in premarket trade, up 2.8 percent from a Monday close at $27.23 on the New York Stock Exchange.
Like other banks and insurers, Bank of New York Mellon, which focuses on securities services for institutional clients and asset management, has been hurt by losses on complex debt and mortgage-related securities during the financial crisis.
It said it is restructuring $8.5 billion of these securities in a bid to reduce risk in this investment portfolio.
“We took advantage of the recent strength in the fixed income markets by selling or recognizing losses on a significant portion of our investment securities portfolio,” said Chief Executive Officer Robert Kelly.
Bank of New York Mellon in August paid $136 million to redeem U.S. Treasury Department warrants to buy its stock. The warrants, which would have let the government buy 14.5 million shares, were issued under the government’s Troubled Asset Relief Program.
Bank of New York Mellon in June bought back $3 billion of preferred shares it had issued to the government.
(Reporting by Christopher Kaufman and Elinor Comlay; editing by John Wallace)