BNY Mellon's Q4 Profit Surges on Higher Fees and Interest Revenue

BNY Mellon, a leading global financial services company, reported a significant surge in its fourth-quarter profit, driven by higher fees and interest revenue. The company's strong performance was underpinned by robust growth in key metrics, reflecting its strategic initiatives and operational efficiency.

The Bank of New York Mellon Corporation (BK) shares traded higher in the premarket session on Wednesday, following the release of its fourth-quarter 2024 results. The finance behemoth reported adjusted earnings per share (EPS) of $1.72, marking a 33% year-over-year increase and surpassing the street view of $1.56. Quarterly revenue reached $4.847 billion, an 11% increase from the previous year, outpacing the analyst consensus of $4.653 billion.

Fee revenue in the quarter grew by 9% year-over-year to $3.513 billion, driven by higher market values, increased client activity, and an uptick in foreign exchange revenue. Net interest income rose by 8% to $1.19 billion, primarily due to higher investment securities portfolio yields and balance sheet expansion. Noninterest expense fell by 16% year-over-year, driven by FDIC adjustments, savings, and lower severance costs, partially offset by merit increases and investments.



The provision for credit losses totaled $20 million for the quarter, mainly due to reserve increases tied to commercial real estate exposure. The Bank of New York Mellon reported average deposits of $286 billion, which increased by 5% year-over-year and declined by 1% sequentially. The company's fourth-quarter tier 1 leverage ratio stood at 5.7%, down 23 basis points year-over-year and 29 basis points sequentially. Adjusted pre-tax operating margin totaled 34%, up from 29% a year ago.

BNY Mellon declared a common stock dividend of $0.47 per share, payable on February 7, 2025, to shareholders of record as of the close of business on January 27, 2025. The bank returned $1.1 billion to common shareholders in the fourth quarter, including $349 million in dividends and $750 million in share repurchases, achieving a total payout ratio of 102% for the full year of 2024.

President and Chief Executive Officer Robin Vince commented on the company's strong performance, stating, "We launched a new commercial coverage model, developed new products and solutions for our clients, completed a brand refresh, announced and closed our first acquisition in several years, and commenced the phased transition to our strategic platforms operating model. We also continued to invest in our culture and attracted top talent to further strengthen our team."

BNY Mellon's robust financial performance in the fourth quarter of 2024 reflects its strategic focus on innovation, client solutions, and operational improvements. The company's strong capital position and commitment to returning capital to shareholders make it an attractive prospect for value investors seeking stability and growth in the financial sector. As BNY Mellon enters 2025, it is well-positioned to continue its momentum and unlock further opportunities embedded within the company.