(Reuters) - Bank of New York Mellon Corp (BK.N) reported a better-than-expected first-quarter profit on Thursday, as surging equity markets and a weaker dollar helped drive double-digit growth in its assets servicing and management businesses.
Shares of the world’s largest custodian bank rose 3.3 percent at $54 in premarket trading.
Asset servicing revenue surged 13 percent to $1.52 billion, while asset management revenue jumped 16 percent to $770 million, the company said.
“While we should remain beneficiaries of strong and growing markets over the long term, we are focused on continuing to increase our organic revenue growth,” Chief Executive Charles Scharf said in a statement.
Under Scharf, the bank has been investing heavily in technology to automate most of its processes and cut costs.
However, Scharf said despite the company’s heavy investment in technology it saw minimal growth in total expenses, which rose 3.7 pct in the latest quarter.
Scharf, who led Visa Inc (V.N) for four years until December 2016, replaced Gerald Hassell as CEO in July.
Assets under management jumped 8 percent to a record $1.9 trillion, while fee revenue rose 10.3 percent to $3.32 billion.
As a custody bank, BNY gets most of its revenue from managing money of customers that include big banks and hedge funds as well as managing investments for clients.
The bank’s net income applicable to common shareholders rose to $1.14 billion, or $1.10 per share, in the quarter ended March 31 from $880 million, or 83 cents per share, a year earlier.
Analysts on average had expected earnings of 96 cents per share, according to Thomson Reuters I/B/E/S.
Reporting by Diptendu Lahiri in Bengaluru; Editing by Anil D'Silva