BNY profit rises on record revenue and strong fee growth

The world's largest custodian bank, The Bank of New York Mellon Corporation, reported a rise in first-quarter profit on Thursday, as strong fee income and higher client asset values bolstered performance. Global markets experienced sharp fluctuations during the period, influenced by geopolitical tensions involving Iran and a broad selloff in software stocks linked to artificial intelligence. These market conditions prompted investors and fund managers to rebalance their portfolios, which increased client activity for the bank. BNY makes a significant portion of its income from safeguarding and servicing client assets, and saw assets under custody and administration climb 12% year-on-year to $59.4 trillion as of March 31. Assets under management stood at $2.1 trillion. Fee revenue, the bank's largest source of income, jumped 11% in the quarter to $3.77 billion, supported by higher market levels and continued client engagement. Net interest income, the spread between earnings from assets and costs on liabilities, surged 18% to $1.37 billion, boosted by higher yields on the reinvestment of matured assets. CEO Robin Vince has been pushing to streamline operations and invest in technology to improve efficiency and drive growth. The return on tangible common equity, a metric tracking profitability using only hard assets, rose to 29.3% in the quarter from 24.2% a year ago. In an interview regarding the bank's performance, Vince noted the impact of market activity. > "When there are activity levels, when there is quantity issuance, and theres a lot of fixed income issuance thats been going on this year for all the reasons that youre well aware of, our business is firing on many of these cylinders." The company posted a net income of $1.63 billion, or $2.24 per share, compared with $1.22 billion, or $1.58 per share, a year earlier. Revenue rose to a record $5.4 billion, up 13% from a year ago.