BoNY securities servicing hit by weak markets

GLOBAL – The Bank of New York, posting lower quarterly profits, says its securities servicing business was hit by weak capital markets in the third quarter.

“The weak capital markets environment, particularly in equities and foreign exchange, where volumes were lacklustre and volatility very low, adversely impact the company’s securities servicing and trading businesses,” the bank said in its earnings statement.

The comments came is it reported that third-quarter net income fell 4.5% to 354 million dollars (280.5 million euros) from the second quarter’s 371 million dollars. The third quarter figure compares with the 260 million dollars posted in the same period last year.

Securities servicing fees declined by four percent to 32 million dollars over the second quarter – though they rose four percent from a year ago.

Investor servicing fees slipped one million dollars to 228 million dollars – reflecting “lower transaction activity and seasonally lower securities lending revenues, offset in part by new business wins in global fund services”. Total assets under custody rose to 8.9 trillion dollars.

“We are confident that our diverse business and client base position us well to capitalise as market volumes and investment flows increase,” said chairman and chief executive Thomas Renyi.

Meanwhile Northern Trust reported a one percent increase in third-quarter net income to 114.7 million dollars. Revenues rose four percent to 560.0 million dollars.

"This quarter's performance benefited from an increase in trust fees, higher net interest income, and continued strength in the quality of our loan portfolio, offset by lower foreign exchange trading results,” said chairman and CEO William Osborn.

“We are pleased to report record trust assets under administration of 2.4 trillion dollars, up 25%, and record assets under management of 535 billion dollars, up 23%.

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