BNY Mellon posts 3Q loss on hefty charge

[October 20, 2009]  NEW YORK (AP) -- Bank of New York Mellon Corp. said Tuesday that it took a hefty charge during the third quarter to restructure its investment portfolio, resulting in a loss of almost $2.5 billion for the period.

The New York-based trust bank said by selling and writing down the value of its most risky securities during the quarter, it has significantly reduced the risk of future losses in the portfolio.

A drop in fee revenue also weighed on results. BNY Mellon primarily provides asset and wealth management services for institutional, corporate and high-net-worth individuals so the bulk of its revenue comes from fees related to those services.

Total fee revenue was $2.62 billion, down 15 percent from $3.09 billion a year earlier. However, total fee revenue increased 4 percent from the second quarter.

For the period ended Sept. 30, the bank reported a net loss applicable to common shareholders of $2.46 billion, or $2.05 a share. A year ago, the bank reported earnings of $303 million, or 26 cents per share.

On an adjusted basis, excluding the restructuring and other one-time charges, the bank said it earned 54 cents per share. Analysts, who typically exclude unusual items from their estimates, were expecting a profit of 48 cents per share, according to a poll by Thomson Reuters.

Its shares rose 27 cents to $27.50 in premarket trading.

[Associated Press]

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