July 12 (Reuters) - BNY posted a 10% rise in

second-quarter net profit on Friday, as higher investment

service fees more than offset the world's largest custodian

bank's lower interest income.

The bank's assets under management (AUM) climbed 7% to $2.05

trillion from a year earlier, as more investors aimed to gain

from a rally in the U.S. markets, while the assets under custody

or administration (AUC/A) rose 6% to $49.5 trillion.

The benchmark S&P 500 index rose about 11% in the

last three months on hopes of a soft landing for the economy.

BNY's investment services fees for the second-quarter rose

to $2.36 billion from $2.25 billion, while income from interest

from its portfolio of securities, loans and deposits fell 6% to

$1.03 billion.

The bank's shares have risen about 18.1% this year, compared

to a nearly 14% rise in the KBW Bank Index. According to

analysts, the bank has a more diversified business model

compared to rivals and is less exposed to seismic market shifts.

BNY's net income for the second quarter rose to $1.14

billion, or $1.52 per share, from $1.04 billion, or $1.31 per

share, a year earlier, while revenue rose 2% to $4.6 billion.

The 240-year-old bank changed its name to BNY from Bank of

New York Mellon Corp ( BK ) in the reported quarter.

(Reporting by Pritam Biswas in Bengaluru; Editing by Shinjini

Ganguli)