Bank of New York Mellon Corp. fell as much as 5.4 percent in New York trading Monday after the world’s largest custody bank said it would book a charge of as much as $100 million this quarter for cost-cutting measures.
BNY Mellon plans to save as much as $700 million before taxes by 2015, through operational improvements such as consolidating applications, insourcing software development and consolidating locations, the New York-based bank said Monday in an investor presentation.
BNY Mellon is cutting expenses as lawsuits over the pricing of foreign exchange transactions are pushing up legal costs and interest rates near zero erode revenue. Chief Executive Officer Gerald Hassell, who took over in September after Robert P. Kelly left in a dispute with the board of directors, said the market environment will be challenging for an extended period.
“The cuts do not have the impact that most people were hoping” for, Gerard Cassidy, an analyst with RBC Capital Markets in Portland, Maine, said in an e-mail.
BNY Mellon declined 4.9 percent to $20.46 at 3:23 p.m. in New York. The stock has lost 32 percent since the start of the year.
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