BNY Mellon profit halves on FDIC deposit fund, other charges
(Reuters) -Bank of New York Mellon Corporation on Friday reported a 50% fall in fourth-quarter profit due to some one-time charges, including those tied to the Federal Deposit Insurance Corporation's (FDIC) deposit insurance fund.
BNY incurred a one-time charge of $752 million tied to the FDIC special assessment, severance and litigation reserves, which were dealt a blow of roughly $16 billion when some mid-sized lenders collapsed in early 2023.
Large banks are required to replenish the FDIC fund, which insures customer deposits in the event of a bank failure.
Major banks JPMorgan Chase (NYSE:JPM), Wells Fargo and Citigroup also recorded charges tied to the FDIC fund.
BNY Mellon (NYSE:BK) took another $150 million in charges in the quarter related to a fair-value adjustment on a prior year divestiture.
Its assets under custody or administration (AUC/A) rose 8% to $47.8 trillion from a year earlier, driven by higher quarter-end equity market levels and client flows, and assets under management (AUM) also climbed 8% to $2 trillion.
The benchmark S&P 500 closed 2023 up about 24%.
BNY Mellon's net interest revenue, the difference between its earnings on assets and liability payments, rose 4% to $1.10 billion in the fourth quarter.
For most of last year, banks' interest income on assets was boosted by the U.S. Federal Reserve's interest rate hikes.
BNY Mellon's fee revenue was flat at about $3.21 billion, compared with $3.22 billion a year earlier.
Net profit came in at $256 million, or 33 cents per share, compared with $509 million, or 62 cents per share, a year earlier.
Total revenue rose 10% from last year to $4.31 billion, and average deposits rose 4% sequentially to $273.08 billion.
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