Total fees increased 10 per cent at the wealth management division of newly-merged Bank of New York Mellon.

This was driven by organic growth, a 43 per cent increase in new business revenue from the third quarter of 2006 and improved market performance says the bank.

Total client assets of $170 billion increased 14 per cent compared year-on-year and 5 per cent (unannualized) sequentially, driven by new business, improved markets and net long-term flows of assets under management of $1 billion in the third quarter.

But net interest revenue decreased 9 per cent over the prior year and 6 per cent (unannualised) sequentially as higher loan and deposit volumes were offset by lower spreads.

Non-interest expense, excluding intangible amortisation, increased 5 per cent due to merit increases and expenses associated with new distribution channels.

Non-interest expense decreased 1 per cent (unannualised) sequentially, partially reflecting the impact of merger-related expense synergies.

Asset and wealth management fees totalled $854 million. On a pro forma combined basis, this represents an increase of 25 per cent, reflecting net new business and higher equity market levels.

Sequential revenue increased 1 per cent (unannualised), in line with market levels. The impact of market volatility on some alternative, quantitative and fixed income strategies was offset by strong net inflows into money market funds.

The bank’s Wealth Management division has a presence in 14 of the top 25 domestic wealth markets and 81 offices in domestic and international locations, according to its results statement.

Overall, the bank reported third quarter income from continuing operations of $642 million and diluted earnings per share of 56 cents, which compares to 41 cents a year ago and 62 cents sequentially.