BNY Mellon achieves YoY lending revenue growth despite headwinds
21 January 2021 US
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BNY Mellon is among the agent lenders that achieved a year-on-year (YoY) increase in revenue from their securities lending businesses despite posting below-average returns in Q4 2020.
Full year revenue for the bank’s agency lending business, which sits under its investment services business, reached $170 million last year, representing a modest increase from the 2019’s $163 million revenue figure.
Meanwhile, Q4 earnings saw a 10 per cent decline, compared to the same period in 2019, to sit at $36 million.
Revenue was also down slightly from Q3, when the bank brought in $37 million, and significantly below Q2’s $51 million, which was a two-year record high for quarterly returns.
Across the lender community, the second quarter of last year proved to be a bumper period with several agents and buy side members posting record returns, while the final months of the year largely brought below-par returns compared to each house’s own averages.
BNY Mellon’s agency lending business reported the market value of securities on-loan at $435 billion as at the end of Q4 2020, up from $378 billion in the previous quarter, and representing a 15 per cent increase from $378 billion recorded during Q4 2019.
These on-loan figures do not include securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totalled $68 billion on 31 December 2020, compared to the $60 billion on 31 December 2019.
Elsewhere, BNY Mellon’s clearance and collateral management business saw earnings decrease from $277 million in Q3 2019 to $275 million Q4 2020. Revenue was also down YoY from $280 million.
In its report, BNY Mellon says the year-over-year decrease in its collateral management and clearance business primarily reflects lower investment income due to the 4Q 2019 sale of an equity investment and lower intraday credit fees, partially offset by growth in non-US collateral management.
Full year revenue for the bank’s agency lending business, which sits under its investment services business, reached $170 million last year, representing a modest increase from the 2019’s $163 million revenue figure.
Meanwhile, Q4 earnings saw a 10 per cent decline, compared to the same period in 2019, to sit at $36 million.
Revenue was also down slightly from Q3, when the bank brought in $37 million, and significantly below Q2’s $51 million, which was a two-year record high for quarterly returns.
Across the lender community, the second quarter of last year proved to be a bumper period with several agents and buy side members posting record returns, while the final months of the year largely brought below-par returns compared to each house’s own averages.
BNY Mellon’s agency lending business reported the market value of securities on-loan at $435 billion as at the end of Q4 2020, up from $378 billion in the previous quarter, and representing a 15 per cent increase from $378 billion recorded during Q4 2019.
These on-loan figures do not include securities for which BNY Mellon acts as agent on behalf of CIBC Mellon clients, which totalled $68 billion on 31 December 2020, compared to the $60 billion on 31 December 2019.
Elsewhere, BNY Mellon’s clearance and collateral management business saw earnings decrease from $277 million in Q3 2019 to $275 million Q4 2020. Revenue was also down YoY from $280 million.
In its report, BNY Mellon says the year-over-year decrease in its collateral management and clearance business primarily reflects lower investment income due to the 4Q 2019 sale of an equity investment and lower intraday credit fees, partially offset by growth in non-US collateral management.
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