Bank of New York Mellon (BNY) is looking to buy back stock and resume dividend payments in 2011, rather than pursue more large acquisitions, Chief Executive Robert Kelly said.
"We hope to be in a position where we can do dividends and buybacks again," Kelly said in a telephone interview. "Last year, there were some motivated sellers. I kind of view that as a one-time event."
New York-based BNY, the world's largest custody bank, cannot resume dividends or buybacks, suspended because of the 2008 financial crisis, without regulators' permission, Kelly said. He expects to hear back by mid-year from the Federal Reserve on the bank's plan to meet new Basel III capital standards, he added.
"We're well-positioned from a capital perspective," Kelly said. "But it's a complicated process they have to go through." The Fed has authority to tighten capital ratios beyond the new rules for systemically important banks.
Shares of BNY Mellon lost 9 cents, or 0.3 percent, to $31.93 in New York Stock Exchange trading on January 19. The bank reported fourth-quarter operating income gained 10 percent from a year earlier. The bank notched just under $3 billion of fee income in the fourth quarter, its best total since before the 2008 financial crisis. The 16 percent jump from a year earlier was helped by the acquisitions of PNC Financial Services Group's Global Investment Servicing business and BHF Asset Servicing of Germany.
Total assets under custody hit a record $25 trillion at the end of 2010, a 12 percent increase from the end of 2009 and a 2 percent gain from the end of the third quarter. Kelly said the financial system now looks healthy to him.
"It's been breathtaking how quickly the financial system has repaired itself," he said. "All the major banks are essentially profitable in this country and their balance sheets continue to get healthier."
Comments
Comments are closed for this article.