(Reuters) - Bank of New York Mellon Corp said on Wednesday it expects net interest revenue to decline again in the current quarter as the world’s largest custodian bank pays higher interest rates to attract deposits, sending its shares down 9 percent.

FILE PHOTO: The Bank of New York Mellon Corp. building at 1 Wall St. is seen in New York's financial district March 11, 2015. REUTERS/Brendan McDermid

The U.S. Federal Reserve in March did an about-turn on its campaign to raise interest rates and now sees no hikes this year on risks to the economy from a global slowdown.

“While the current expectations for the yield curve will likely negatively impact our revenue growth for the next several quarters, we will remain disciplined on expenses..,” said Chief Executive Officer Charlie Scharf.

Scharf said competition for deposits was still high, and that the bank expected the rate it paid on deposits to increase a little.

The bank, which gets bulk of its revenue from managing money of clients such as big banks and hedge funds, said it expects second-quarter net interest revenue to fall between 3 percent and 5 percent, from the prior quarter.

Net interest revenue fell 8.5 percent to $841 million in the first quarter from a year earlier.

“We see flat revenues for BNY in 2019, and additional pressure on the company and its new(ish) CEO to produce more measurable turnaround results,” said Cathy Seifert, an analyst with CFRA Research.

BNY also posted its first quarterly profit miss in two years, as calmer markets in the first three months of the year after a volatile December led to a slowdown in client activity, causing a 9 percent drop in fee revenue to $3.03 billion.

The company’s asset servicing revenue fell 7.4 percent to $1.41 billion, while asset management revenue dropped 17 percent to $637 million.

Overall revenue fell 6.7 percent to $3.90 billion, missing analysts’ average estimate of $4 billion, according to IBES data from Refinitiv.

The bank’s weak revenue overwhelmed its management of expenses, said Susan Roth Katzke, an analyst at Credit Suisse.

Net income applicable to common shareholders fell 20 percent to $910 million, or 94 cents per share, missing estimates of 96 cents. (reut.rs/2ZlhuuP)

The New York-based bank said it had set aside $7 million for credit losses due to the bankruptcy of a California utility.

BNY’s shares were down 9 percent at $48.6 in late-morning trading.