Saturday, December 9, 2023

Irish arm of BNY Mellon sees after-tax profits near double despite €10m Central Bank settlement

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The Irish arm of the world’s largest custodian bank, BNY Mellon, saw after-tax profits almost double last year despite rising costs, increasing to $21.97m (€20.1m) in 2022. 

Up from $11.6m (€10.59m) in the previous year, BNY Mellon said its performance was primarily driven by “growth in Transfer pricing income” earned from the bank’s group entities, which offset rising market data costs and technology allocations, as well as a regulatory sanction from the Central Bank of Ireland exceeding €10m. 

According to the regulator, BNY Mellon – which has been operating in Ireland since 1994 – was reprimanded for regulatory breaches relating to the outsourcing of fund administration activities and how the group engaged the Central Bank in addressing these issues. 

The company settled with the regulator, paying an administrative sanction of €10.78m in 2022 – marking the largest monetary penalty imposed on a Fund Service Provider in Ireland.

Turnover for the year rose by 9%, increasing to $285.4m (€260.6m) last year, with the group noting a “satisfactory” level of business and year end financial position. 

However, BNY Mellon listed a number of challenges, adding that “uncertain times” created a variety of issues and risks, including inflation and increased market volatility. The company said regulatory measures imposed on Russia following its invasion of Ukraine had “impaired normal global economic trading activities,” however, it affirmed that the group expected to remain profitable “with a robust balance sheet” over the next twelve months. 

BNY Mellon was formed from the merger of the Bank of New York and Mellon Financial Corporation in 2007, and is a leading trustee and depository for offshore funds domiciled in Ireland. The Bank has offices in Dublin, Cork and Wexford.

According to its latest financial statements filed to the Company Registrations Office, BNY Mellon employed an average of 892 employees in Ireland, with the average salary exceeding €97,000 in 2022. 

In January of this year, the bank announced that it would be cutting 3% of staff after its quarterly revenue of €3.92bn missed analyst estimates, however, the impact this has had on its Irish workforce is still unknown. 

In 2022, BNY Mellon has €44.3tn (€40.18tn) in assets under custody or administration and $1.8tn (€1.64tn) in assets under management, making it the largest custodian bank in the world. 

According to the Central Bank of Ireland, BNY DAC was the second largest fund administrator in Ireland with just over €1.13tn in assets under administration in 2022. 

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