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BNY Mellon revenue falls 1 percent; tax case triggers loss

A BNY Mellon sign is seen on their headquarters in New York's financial district, January 19, 2011. REUTERS/Brendan McDermid
A BNY Mellon sign is seen on their headquarters in New York's financial district, January 19, 2011. REUTERS/Brendan McDermid

(Reuters) - BNY Mellon Corp said on Wednesday that first-quarter revenue fell 1 percent as the world's largest custody bank reported a loss due to a high-stakes tax battle with the U.S. Internal Revenue Service.

BNY Mellon's net loss of $266 million, or 23 cents a share, reflected a U.S. Tax Court decision announced in February that triggered a previously announced $854 million charge against profits.

In the year-earlier quarter, BNY Mellon reported net income of $619 million, or 52 cents a share.

Excluding the tax-related charge, the bank earned 50 cents a share, missing the average analyst estimate by 2 cents, according to I/B/E/S Thomson Reuters.

Revenue totaled $3.61 billion, down 1 percent from a year ago. Bright spots included 10 percent gains in both investment management and performance fees, and foreign exchange trading.

Net interest revenue at the bank, however, fell 6 percent to $719 million, reflecting lower yields on reinvested securities and the elimination of interest on European Central Bank deposits.

(Reporting by Tim McLaughlin; Editing by Lisa Von Ahn and Jeffrey Benkoe)

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