Bank of New York Mellon Corp., known as BNY Mellon (BK) Wednesday reported a loss for its first quarter, reflecting mainly a previously announced tax charge as well as lower revenues. Adjusted earnings topped analysts' expectations, while revenues came in line with view.
In February, BNY Mellon said it would appeal an adverse ruling from the U.S. Tax Court regarding the Internal Revenue Service's disallowance of certain foreign tax credits claimed for 2001 and 2002. The firm had announced its plans to take a $850 million after tax impact from the ruling in its first-quarter 2013 results.
In the first quarter, net loss applicable to common shareholders was $266 million or $0.23 per share, compared to a profit of $619 million or $0.52 per share in the previous year.
Excluding the charge of $854 million or $0.73 per share, earnings were $0.50 per share in the first quarter of 2013. On average, 20 analysts polled by Thomson Reuters expected earnings per share of $0.47 for the quarter. Analysts' estimates typically exclude one-time items.
Gerald Hassell, chairman and chief executive officer of the company said, "We are pleased to report our fourteenth consecutive quarter of net long-term asset management flows, and continued growth in investment services fees."
The New York-based bank noted that investments in its Investment Management, Global Collateral Services and Global Markets businesses have positioned it well for future growth.
Investment management and performance fees increased 10 percent year-over-year to $822 million.
Total revenues for the quarter declined to $3.61 billion from $3.65 billion in the same quarter last year. On a non-GAAP basis, total revenues were $3.60 billion. Analysts estimated revenues of $3.60 billion for the quarter.
Total fee revenue was $2.84 billion, unchanged from last year. Net interest revenue declined to $719 million from $765 million a year earlier.
As at March 31, Assets under management increased 9 percent year-over-year to $1.4 trillion. Provision for credit losses was a credit of $24 million in the first quarter of 2013.
The company said its Basel I Tier 1 capital ratio was 13.6 percent, compared to 15.6 percent a year ago. In the first quarter of 2013, BNY Mellon was required to implement the Basel 2.5 - final market risk rule, the implementation of which resulted in an about 35 to 40 basis points decrease to the Basel I Tier 1 common equity to risk-weighted assets, it said.
BK closed Tuesday's regular trading at $27.76 on the NYSE. In the pre-market activity, the shares are down 2.76 percent.
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