The Bank of New York Company Inc. says that it currently expects that earnings for the third quarter of 2001 will be negatively impacted by approximately US$125 million, or 17¢ per share, as a direct result of the World Trade Center disaster.

The company says that it had expected to meet the First Call consensus EPS of 52¢ for the third quarter prior to the events of September 11. The estimated impact of the disaster reflects additional costs associated with: the disabling of two of its facilities close to the World Trade Center; full outfitting of contingency locations and associated infrastructure links; reoccupying its headquarters; and other expenses, including overtime, outside vendors, and extra security.

In addition, the company experienced a reduction of revenues in the quarter due to the temporary closure of the markets and higher than normal levels of excess liquidity resulting from the disruption of the markets and payment processing. The BoNY was particularly hard hit in the clearing and processing area, taking weeks to resolve some of its pending trades.

The company says that it believes that a substantial portion of the impact of the disaster is covered under its insurance policies, and that these insurance recoveries are expected to be recorded in future quarters.

“This tragedy of unprecedented proportions has deeply affected us all and we extend our deepest sympathies to the families of two of our own employees and the thousands of others who were lost,” said Thomas Renyi, chairman and CEO.

“We continue to work closely with our clients and other market participants to resolve any remaining issues arising from market disruptions brought on by this disaster. Our results for the quarter up to the date of the tragedy were consistent with our and the investment community’s expectations in light of the market environment. While near-term results will continue to be affected by events as they unfold, our long-term earnings outlook and capital strength remain unchanged.”