Magazine article American Banker

New Customers, Cost Cuts Helped Bank of New York

Magazine article American Banker

New Customers, Cost Cuts Helped Bank of New York

Article excerpt

Bank of New York Co. Inc. says its third-quarter earnings benefited from a string of new clients and tighter expense controls.

Thomas A. Renyi, its chairman and chief executive officer, told investors and analysts during a conference call Wednesday morning that it lured 50 customers with close to $300 billion of custody assets away from State Street Corp., which bought Deutsche Bank AG's $1.9 trillion-asset global portfolio this year.

And the $95.2 billion-asset company continues to add clients. Among the newest additions, announced Wednesday, were a $90 billion-asset portfolio from AIG Global Investment Group Inc., and the State of New Jersey's global custody and securities lending services, with $9 billion of assets.

"I am pleased with the pace of new business wins, the potential opportunities to expand our business," Mr. Renyi said.

Bank of New York's profits rose more than threefold, to $260 million, from the same quarter last year, when it had to digest sizable losses from telecommunications lending and adjust its investment portfolio in response to the falling equity market.

Earnings per share fell 10.6% from a year earlier but rose 2.4% from the second quarter, to 42 cents, meeting analysts' consensus.

Core income was actually $306 million, and Pershing generated another $16 million, but the sale of BNY Financial Corp. to General Motors Acceptance Corp. took away $62 million of income.

Total revenue increased 5.4% from the second quarter, to $1.47 billion. That boost was less than some had expected, given the market rebound. Excluding Bank of New York's acquisition of the securities clearing firm Pershing Inc. on May 1 for $2 billion from Credit Suisse First Boston Corp., revenue rose 21% from a year earlier.

Securities servicing fees, the bulk of Bank of New York's noninterest income, rose 3. …

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