Pershing, the custody unit of Bank of New York Mellon (BNY), sees hope on the horizon.
This was the key message from BNY executives to analysts after Pershing reported another quarter of net asset outflows, amounting to $23 billion.
Pershing, which manages assets for wealth management companies, lost a significant client during last year’s regional bank crisis. The collapse of First Republic Bank, acquired by JPMorgan Chase in May 2023, led to substantial asset transfers from Pershing to JPMorgan's platform. Consequently, Pershing has experienced several quarters of net asset outflows.
Without mentioning First Republic directly, BNY CFO Dermot McDonogh expressed relief over the nearing end of this transition. “We expect that to be fully out of the portfolio by Q3,” he said in response to an analyst's question.
Pershing reported $2.6 trillion in assets under administration at the end of the second quarter. This figure is consistent with the first quarter and reflects an 8% increase from the same period last year, according to BNY’s quarterly earnings report.
McDonogh highlighted the efforts of the Pershing team to attract new business. He mentioned the growing success of the new Wove technology platform, which secured 12 new customers during the second quarter. “The pipeline continues to grow, and we are on track to meet our goal of $30 million to $40 million in realized revenue for 2024,” he noted.
On Friday, Pershing announced that Arete Wealth, a wealth manager with $6 billion in AUM, will begin using the Wove platform.
Additionally, Pershing disclosed that Osaic, a network of independent broker-dealers with over 11,000 financial advisors, has renewed its custody and clearing relationship with Pershing.
McDonogh assured analysts of Pershing's strong position and potential for growth. “We believe we’re in good shape and there is momentum in a very large market where we are a major player,” he stated.
Shares of BNY rose 5.51% on Friday after the bank’s earnings surpassed Wall Street estimates, with second-quarter adjusted earnings at $1.51 per share, compared to the $1.43 expected by analysts surveyed by FactSet.
