Bank of New York Mellon recorded third-quarter growth with a hint of caution, as falling stocks in recent days have put up a few red flags.
"It's been a constructive but uneven operating environment," Chief Executive Robin Vince said on a media call Thursday. "Just the price action of the past 24 hours, you can see there's a lot going on in the markets."
During the quarter, stocks were bolstered by rising corporate earnings and investments in the artificial-intelligence industry, Vince said. BNY has been able to weather challenges including inflation, rising interest rates and geopolitical tensions, he said.
The bank posted net income applicable to shareholders of $1.61 billion, or $2.34 a share, up from $1.34 billion, or $1.88 a share, in the same quarter a year earlier.
Stripping out one-time items, adjusted earnings were $2.37 a share. Analysts polled by FactSet had been expecting $2.27 a share.
Total revenue rose 12% to $5.68 billion, ahead of analysts' estimates for $5.55 billion.
"This is another demonstration that our diversified and resilient business model really does have the ability to deliver across market environments," Vince said of the results.
Net interest income rose 15% to $1.42 billion, thanks in part to the reinvestment of securities at higher yields. Fee revenue was up 12% at $4.08 billion, primarily reflecting new business, higher client activity and higher market values.
Higher revenue-related expenses drove BNY's noninterest expense up 8%.
This week, stock indexes traded down as AI-related stocks including CoreWeave, Oracle and Micron Technologies lost value. Vince spoke to the downturn, saying he still believed demand for AI would outplace the current pipeline of supply.
He did say there could be weakness among some borrowers in the AI industry because more players are jumping into the sector.
"Weak structures will get exposed," he said. "It wouldn't surprise me that there could be an issue with a provider, a structure, a transaction."
Bank of New York Mellon shares were up 2.4% to $141 in premarket trading.
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