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BNY Mellon posts YOY decline in Q4'18 net income, investment management revenue

Bank of New York Mellon Corp. posted net income applicable to common shareholders of $832 million, or 84 cents per share, for the 2018 fourth quarter, compared to net income of $1.13 billion, or $1.08 per share, in the same quarter of 2017.

Fourth-quarter 2018 results included a hit of $155 million, or 16 cents per share, for severance, real estate and litigation, offset by adjustments to estimates for U.S. tax legislation and other changes. The year-ago quarter's results included a net benefit of $181 million, or 17 cents per share, for tax reform, offset by severance, litigation and other charges.

Adjusted net income applicable to common shareholders was $859 million in the fourth quarter of 2018, down from $1.16 billion in the previous year.

The S&P Global Market Intelligence consensus normalized EPS estimate for the 2018 fourth quarter was 92 cents.

Fourth-quarter 2018 total revenue amounted to $4.01 billion, up 7% from the 2017 fourth quarter. Fee revenue for the recent quarter was $3.15 billion, up 9% from a year ago, primarily reflecting the impact of U.S. tax legislation on the company's renewable energy investments.

"Revenue growth in several of our investment services businesses was more than offset by lower revenue in our investment management business," Chairman Charlie Scharf said. Investment services revenue was up 3% year over year to $3.04 billion, while investment management revenue was down 8% to $963 million, due to lower revenues in asset and wealth management.

The year-over-year decrease in asset management results primarily reflects the impact of net outflows, lower equity markets and the divestiture of CenterSquare Investment Management Inc. which closed in early January. The year-over-year decrease was also due to the unfavorable impact of a stronger U.S. dollar, principally versus the British pound, according to BNY Mellon. In wealth management, the company attributed the decrease primarily to lower equity markets and net interest revenue.

Assets under management in the 2018 fourth quarter amounted to $1.722 trillion, down from $1.893 trillion a year prior.

During the fourth quarter, BNY Mellon repurchased 28.9 million common shares for $1.37 billion, including $830 million of incremental buybacks.

For full year 2018, the company reported net income of $4.10 billion, or $4.04 per share, compared to net income of $3.92 billion, or $3.72 per share, in the previous year.