BNY Mellon Reports Q2 Metrics, FX Revenues Weigh

The Bank of New York Mellon (BNY) Corporation (NYSE: BK) has reported its Q2 2015 financial metrics, which underscored waning foreign exchange (FX) and trading revenues, relative to Q1 2015, according to a BNY statement.

In particular, Q2 net income applicable to common shareholders came in at $830 million, or $0.73 per diluted common share. This figure represents a growth of 6.9% QoQ from $766 million in Q1 2015 – over a yearly basis however, Q2 2015’s net income notched a 49.8% YoY growth from $554 million in Q2 2014.

BNY’s total revenues on an adjusted basis (in millions) marked $3,886 during Q2 2015, a tepid increase of 2.0% QoQ from $3,792 in Q1 2015. Relative to 2014 however, the most recent figures illustrate an advance of 4% YoY from Q2 2014.

In a time when many other banking institutions are slashing costs and cutting personnel groups, BNY Mellon added 200 employees during Q2 2015, bringing its total to 50,500 full-time workers.

According to Gerald L. Hassell, Chairman and Chief Executive Officer of BNY Mellon, in a recent statement on the Q2 metrics, "Our strong second quarter results demonstrated our execution of our key priorities. We are growing our earnings, investing in next-generation operating platforms and Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term controls, attracting new clients and driving the long-term value of our firm for the benefit of our clients and shareholders.”

"The investments we are making in strategic technology platforms and applications are helping our solutions resonate with clients, contributing to our ability to capture new business including a significant middle-office contract to service more than $770 billion in assets for a prominent investment manager. Our costs will increase in the short run as we onboard the new business; however, our platforms are designed to be leveraged by a broader client base, creating shared economies of scale that benefit our clients and drive profitable growth for our shareholders," added Mr. Hassell.

FX & Trading Volumes in Focus

BNY Mellon also yielded a figure of $187 million in FX and trading revenues during Q2 2015. This represents a drop of -18.3% QoQ from $229 million in Q1 2015 – across a yearly timeframe, Q2 2015 showed a jump of 43.8% YoY from Q2 2014

Investors will recall that Q1 saw BNY reaching a point of financial reconciliation with US authorities following FX manipulation charges. The bank subsequently paid a total sum of $714 million, which significantly weighed on its Q1 revenues. In a trend that is commensurate with the rest of the FX industry, Q2 2015 volumes have declined respectively from earlier this year, which saw heightened Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term instigated by the Swiss National Bank (SNB).

Specifically controlling for FX revenue in Q2 2015, BNY reported a figure of $181 million, corresponding to a loss of -17.0% QoQ from Q1 2015 with a jump of 40% YoY from Q2 2014. The surge in YoY revenues is reflective of higher volatility and volumes, as well as higher depositary receipts-related activity.

At the time of writing, BNY (NYSE:BK) shares are trading at $42.97 in pre-market trading. Shares are trading just -2.6% off of a 52-week high of $44.10 earlier this year.