January 20, 2009

Bank of New York income plummets

Fourth-quarter net income plummeted 88 percent at Bank of New York Mellon Corp., the company announced Tuesday.

MarketWatch reported the bank wrote down the value of its investment securities portfolio by more than $1.2 billion.

Bank of New York had a net profit of $520 million in the year-ago period. For the latest quarter, net income, excluding dividends on preferred securities, was $28 million, or 2 cents a share.

Bank of New York said the write-down was mostly the result of illiquid markets for mortgage-backed securities during the quarter.

The actual incurred loss will ultimately be materially lower based on current assumptions, Chief Executive Robert P. Kelly said in a statement. We should have the opportunity to earn back a substantial portion of the write-downs over the remaining lives of the securities.

Meanwhile, State Street Corp., a rival of Bank of New York, said Tuesday it lost nearly 60 percent of its market value, posting a 71 percent drop in its fourth-quarter earnings.