Morgan Stanley Bank of New York Mellon Working Hard to Tread Water

Morgan Stanley published a research report concerning Bank of New York Mellon Corp.'s

less than stellar 4Q11 and its efforts to improve. According to Morgan Stanley, “BK posted 4Q11 operating EPS of $0.50, -2c vs. our estimate and -3c vs. the street. Revenue was 8% worse than our estimate due to weakness in asset servicing. AUC was flat q/q despite the S&P being up 11%. We estimated AUC growth of 5%, and JPM's AUC growth was 4% in 4Q11. Revenue also weak due down to client activity/markets in 4Q11. However, tightly managed expenses drove an in-line PPoP. Our EPS likely slightly down on lower AUC, mitigated by expense cuts which are hitting the bottom line.” Morgan Stanley maintains its Underweight rating on Bank of New York Mellon, which closed yesterday at $21.27.