BlackRock announced third quarter investment advisory, administration fees and securities lending revenue of $1.9 billion, a 9% increase from $1.8 billion in the third quarter 2010. The firm said the increase in fees reflected growth in average long-term AUM, which included the benefit of net new business, partially offset by a decline in fees from cash management products due to lower average AUM. Fees from the above business lines contributed to an increase in third quarter revenue, which was $2.2bn, up 6% from $2.1 billion in third quarter of 2010, said BlackRock.
However, third quarter investment advisory, administration fees and securities lending revenue decreased $151 million from $2.1 billion in second quarter 2011. BlackRock said the decline in revenue reflected market driven reduction in equity AUM and $46 million lower securities lending fees due to a decline in average balances of international securities on loan, partially offset by the benefit of one additional revenue day in the current quarter. These revenues contributed to a 5% decrease in revenues from $2.3 billion in second quarter 2011.
BlackRocks third quarter 2011 net income was $595 million, up 8% from a year ago and down 4% from second quarter 2011. Operating income was $777 million and non-operating expense, net of non-controlling interests, was $87 million. Third quarter 2011 included a $129 million non-cash benefit due to tax legislation enacted in the UK and an increased in operating margin to 40.1%, up from 38.4% in third quarter 2010.
AUM of $3.345 trillion decreased 3% year-over-year and 9% since second quarter-end driven largely by $303.9 billion of market-related declines across products, said BlackRock.
(JDC)