Last week, the Federal Reserve released the first part of the annual banking stress test results, which examined the impact of a severe economic downturn on the largest U.S. banks. While it stood out as one of the strongest banks during last year’s stress tests, The Bank of New York Mellon Corporation (NYSE:BK) posted perhaps the strongest results among the participants institutions. The results highlighted the strength and sustainability of Bank of New York Mellon’s custodial operations.
How it fared last week
In addition to posting a higher actual Tier 1 common ratio in Q3 in 2012 compared to 2011, Bank of NY Mellon posted an impressive minimum Tier 1 common ratio of 13.2% under the severely adverse scenario. During the previous year’s tests, the bank’s minimum Tier 1 common in the doom-and-gloom scenario was a staggering 13.3%. Regardless of some investors clamoring about the ease of the tests this year, it is hard to deny Bank of NY Mellon’s ability to withstand economic turmoil.
These strong results have driven investors to tune into the Comprehensive Capital Analysis and Review results, which will be released on Thursday afternoon. Within this release from the Fed, investors will know if the participating banks sought and received approval for any increases in dividends or share buyback programs. Investors will also get to see the impact of any new capital plans on stressed ratios.