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UPDATE 2-BNY Mellon's profit beat fails to impress, shares slide

* 3rd-qtr profit 94 cents/shr vs est 92 cents

* Foreign exchange trading rev down 9.7 pct

* Total rev up 2 pct

* Shares down nearly 4 pct (Adds analyst comment, share price, expense forecast)

Oct 19 (Reuters) - Bank of New York Mellon Corp's better-than-expected profit in the third quarter failed to impress investors, who focused instead on the bank's lower foreign exchange trading revenue.

Shares of the world's largest custodian bank fell 3.7 percent in morning trading on Thursday.

BNY Mellon said its foreign exchange revenue slipped 9.7 percent to $158 million in the quarter ended Sept. 30, the first full quarter under new Chief Executive Charles Scharf.

The slide limited BNY Mellon's revenue growth overall to just 2 percent.

"They're not producing the revenue growth that we're seeing in State Street or Northern Trust," said Marty Mosby, an analyst with Vining Sparks.

While BNY Mellon rival State Street Corp's revenue climbed 11 percent in its latest quarter, Northern Trust Corp generated an almost 10 percent increase.

BNY Mellon's foreign exchange revenue has been on a downtrend in recent quarters, hurt mainly by lower depositary receipts revenue, stymieing growth in total revenue.

Results from that unit overshadowed an 8.4 percent increase in the bank's net interest revenue to $839 million, driven by higher interest rates and helping BNY Mellon post a slightly higher third-quarter profit from a year earlier.

The bank expects the slide in depositary receipts revenue to continue, forecasting a nearly $80 million quarter-over-quarter decline in the fourth quarter on a call with analysts.

Total adjusted expenses for the full year are expected to rise about 1 percent, BNY Mellon added.

The company's third-quarter net income applicable to common shareholders rose about 1 percent to $983 million.

Earnings per share was 94 cents per share, topping analysts' average estimate of 92 cents, according to Thomson Reuters I/B/E/S.

Fees and other revenue - the biggest contributor to earnings - rose half a percentage point to $3.17 billion. (Reporting By Aparajita Saxena in Bengaluru; Editing by Sai Sachin Ravikumar)