Bank of New York’s Earnings Miss Estimates. Higher Interest Rates Boost Revenue.

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Bank of New York Mellon’s stock is down more than 30% this year.

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Gabriela Bhaskar/Bloomberg

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Bank of New York Mellon joined other lenders in reporting second-quarter earnings that fell short of Wall Street’s estimates. But higher net interest revenue kept the stock up.

BNY Mellon (ticker: BK) reported a profit of $1.03 a share, falling short of the $1.12 analysts expected, according to FactSet. Earnings were $1.13 a share a year earlier.

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Revenue was $4.3 billion, slightly more than analysts’ forecast of $4.17 billion, for a gain of 7% from a year earlier. Net interest revenue increased by 28% compared with the same period last year to $824 million. Robin Vince, president and CEO-elect, partly attributed the increase to rising interest rates.

Vince is taking over from Todd Gibbons, who is stepping down on August 31. He will be BNY Mellon’s second CEO about three years.

BNY Mellon’s stock was up 1.4% to $41 in premarket trading. The stock has lost more than 30% this year, while the KBW Bank Index (BKX) has fallen more than 25%.

Wells Fargo (WFC) also posted lower earnings than expected on Friday. It had been expected to earn 80 cents a share from revenue of $17.5 billion, but reported a profit of 74 cents from $17 billion in revenue. JPMorgan Chase (JPM) kicked off bank earnings season on Thursday, reporting a profit of $2.76 a share, while analysts had expected $2.89.

Citgroup (C), which has been implementing a turnaround plan that involves selling noncore assets, was an outlier. The bank on Friday reported earnings of $2.19 a share, higher than analysts’ estimates of $1.68 per share. Most recently, the bank sold its businesses in India, Taiwan, and a few other Asian markets as it looks to develop its wealth management, treasury, and trade solutions businesses.

Write to Karishma Vanjani at [email protected]

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Credit: www.marketwatch.com /

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