US bank BNY Mellon has reported a 20 per cent profit fall in the first quarter of the year led by a drop in fee revenue.
Chief executive Charlie Scharf admitted the bank’s performance was “mixed” and that revenue growth would be negatively impacted for the next several quarters.
The New York-based bank posted $910m (£697m) profit in the first three months of 2019, compared with $1.14bn over the same period the previous year and below analysts’ forecasts.
Fee revenue dropped nine per cent $3.03bn dragging total revenue down seven per cent to $3.9bn in the first quarter.
BNY Mellon said asset under management outflows and lower client activity drove the decrease.
The bank's investment management division suffered the sharpest revenue drop, falling 14 per cent.
Scharf said: “Our performance this quarter was mixed. Several of our fee-based metrics in investment services were consistent with recent results, while we experienced weakness in investment management and net interest income.
He added: “While the current expectations for the yield curve will likely negatively impact our revenue growth for the next several quarters, we will remain disciplined on expenses and continue to build out capabilities, which should eventually enable stronger growth.”
The bank also incurred provisions for credit losses of $7m due to its exposure to a California utility company that filed for bankruptcy.
Shares climbed 1.6 per cent after dropping before the market opened.