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2022-04-18 18:06

BNY Mellon Inc. stock closed down more than 2.0% after the company reported financial results for the first quarter of 2022. BNY Mellon is a worldwide investment firm committed to assisting customers with the management and servicing of their financial assets throughout the investment lifetime.

Financial Results
BNY meThe Zacks Consensus Estimate for BK's first-quarter 2022 profits of 86 cents per share was met. The bottom line has dropped by 11.3% from the previous quarter. An 8-cent-per-share charge connected to Russia is included in the reported number. Adjusted profits per share were 94 cents per share excluding this. A surge in net interest revenues has benefited the results. Another positive factor was the increase in asset balances. The underpinning issues, however, were a drop in fee earnings and increasing costs.

On a GAAP basis, net income relevant to common stockholders was $699 million, a decline from $858 million in the same period of previous year. Total sales increased by a smidgeon to $3.93 billion year over year. On a fully taxable-equivalent basis, net interest revenues were calculated as $701 million, an increase of 6.5% year over year.

Year over year, the net interest margin increased 9 basis points to 0.76 percent. On the other hand, t total fee and other income fell 1.2 percent to $3.23 billion. With the exception of investment and other earnings, practically all components of fee revenues decreased. Non-interest costs were $3.01 billion on a GAAP basis, up 5.4% over last year.

What else was interesting
Allowance for loan losses was 0.25 percent of total loans, down 29 basis points from the previous quarter. The company reported a $2 million in credit loss provisions in the reported quarter, compared to $83 million in the previous quarter. Non-performing assets totalled $119 million as of March 31, 2022, up 6.3 percent year over year. As of December 31, 2021, the Tier 1 leverage ratio was 5.3 percent which shows a plunge from 5.5 percent. BNY Mellon repurchased 1.9 million shares for $118 million in the reported quarter.

The worldwide presence of BNY Mellon, as well as its robust balance sheet and AUM balance, will help to sustain financials. Furthermore, the company's careful expense-management actions will almost certainly help the bottom line. However, the possibility of concentration resulting from a heavy reliance on fee-based revenue is a big problem.

The $37.30 billion company trades at a PE multiple of 11.15 at present.