The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q4 2015 Earnings Presentation
29 slides from The Bank Of New York Mellon's earnings presentation, Jan 21, 2016
Slide 1: BNY Mellon Fourth Quarter 2015 Financial Highlights
BNY Mellon Fourth Quarter 2015 Financial Highlights January 21, 2016
Slide 2: Cautionary Statement
2 Fourth Quarter 2015 – Financial Highlights Cautionary Statement A number of statements in our presentations, the accompanying slides and the responses to your questions are “forward-looking statements.” Words such as “estimate”, “forecast”, “project”, “anticipate”, “target”, “expect”, “intend”, “c
Slide 3: Fourth Quarter and Full-Year 2015 Financial Highlights
3 Fourth Quarter 2015 – Financial Highlights Fourth Quarter and Full-Year 2015 Financial Highlights 4Q15 (4Q15 vs. 4Q14) • Earnings per common share of $0.57, including: • $0.11 per common share for the previously disclosed impairment charge related to a recent court decision, litigation and restruc
Slide 4: Fourth Quarter 2015 Key Messages
4 Fourth Quarter 2015 – Financial Highlights Fourth Quarter 2015 Key Messages • Executing on our strategic priorities; delivering on our three-year financial goals set at our 2014 Investor Day • Focused on enhancing the client experience ◦ Deepening existing client relationships and selectively addi
Slide 5: Fourth Quarter 2015 Key Performance Drivers
5 Fourth Quarter 2015 – Financial Highlights Fourth Quarter 2015 Key Performance Drivers • Earnings per common share of $0.68, +17% on an adjusted basis1, driven by growth in Global Collateral Services and Broker-Dealer Services; Net Interest Revenue/Net Interest Margin driven by strategic balance s
Slide 6: Summary Financial Results for Fourth Quarter 2015
6 Fourth Quarter 2015 – Financial Highlights Summary Financial Results for Fourth Quarter 2015 Growth vs. $ in millions, except per share data 4Q15 3Q15 4Q14 3Q15 4Q14 Revenue $ 3,726 $ 3,790 $ 3,689 (2)% 1 % Expenses $ 2,692 $ 2,680 $ 3,524 — % (24)% Income before income taxes $ 871 $ 1,109 $ 164 (
Slide 7: Summary Financial Results for Fourth Quarter 2015 (Non-GAAP)
7 Fourth Quarter 2015 – Financial Highlights Summary Financial Results for Fourth Quarter 2015 (Non-GAAP)1 Growth vs. $ in millions, except per share data 4Q15 3Q15 4Q14 3Q15 4Q14 Revenue $ 3,721 $ 3,795 $ 3,665 (2)% 2 % Expenses $ 2,610 $ 2,603 $ 2,651 —% (2)% Operating leverage2 (222) bps 308 bps
Slide 8: Full-Year 2015 Key Performance Drivers
8 Fourth Quarter 2015 – Financial Highlights Full-Year 2015 Key Performance Drivers • Earnings per common share of $2.85, +19% on an adjusted basis1 driven by growth in Asset Servicing (Global Collateral Services/Broker-Dealer Services), Clearing Services, market-sensitive revenues and continued foc
Slide 9: Summary Financial Results for Full-Year 2015
9 Fourth Quarter 2015 – Financial Highlights Summary Financial Results for Full-Year 2015 Growth vs. $ in millions, except per share data FY 2015 FY 2014 FY 2014 Revenue $ 15,194 $ 15,692 (3)% Expenses $ 10,799 $ 12,177 (11)% Income before income taxes $ 4,235 $ 3,563 19 % Pre-tax operating margin 2
Slide 10: Summary Financial Results for Full-Year 2015 (Non-GAAP)
10 Fourth Quarter 2015 – Financial Highlights Summary Financial Results for Full-Year 2015 (Non-GAAP)1 Growth vs. $ in millions, except per share data FY 2015 FY 2014 FY 2014 Revenue $ 15,126 $ 14,772 2 % Expenses $ 10,453 $ 10,645 (2)% Operating leverage2 420 bps Income before income taxes $ 4,683
Slide 11: 2015 Full-Year Performance (Non-GAAP)
11 Fourth Quarter 2015 – Financial Highlights 2015 Full-Year Performance (Non-GAAP)1 Earnings Per Share $3.00 $2.75 $2.50 $2.25 $2.00 $1.75 $1.50 $1.25 $1.00 FY 2014 FY 2015 $2.39 $2.85 Noninterest Expense ($ in millions) $11,000 $10,800 $10,600 $10,400 $10,200 $10,000 FY 2014 FY 2015 $10,645 $10,45
Slide 12: Fee and Other Revenue (Consolidated)
12 Fourth Quarter 2015 – Financial Highlights Fee and Other Revenue (Consolidated) Growth vs. Year-over-Year Drivers ($ in millions) 4Q15 3Q15 4Q14 Investment services fees: Asset ServicingŸ Growth in Global Collateral Services and Broker-Dealer Services and higher securities lending revenue, partia
Slide 13: Investment Management Metrics
13 Fourth Quarter 2015 – Financial Highlights Investment Management Metrics Change in Assets Under Management (AUM)1 Growth vs. $ in billions 4Q15 FY 2015 3Q15 4Q14 Beginning balance of AUM $1,625 $1,686 Net inflows (outflows): Long-Term: Equity (9) (31) Fixed income 1 (1) Index (16) (27) Liability-
Slide 14: Investment Services Metrics
14 Fourth Quarter 2015 – Financial Highlights Investment Services Metrics Growth vs. 4Q15 3Q15 4Q14 Assets under custody and/or administration at period end (trillions)1,2 $ 28.9 1 % 1 % Estimated new business wins (AUC/A) (billions)2 $ 49 Market value of securities on loan at period end (billions)3
Slide 15: Net Interest Revenue
15 Fourth Quarter 2015 – Financial Highlights Net Interest Revenue Growth vs. Year-over-Year Drivers ($ in millions) 4Q15 3Q15 4Q14 Net interest revenue (non-FTE) $ 760 — % 7 % Net Interest Revenue Ÿ Higher yields Ÿ Shift out of cash into securities and loans Ÿ Lower interest expense on deposits Net
Slide 16: Noninterest Expense
16 Fourth Quarter 2015 – Financial Highlights Noninterest Expense Growth vs. Year-over-Year Drivers ($ in millions) 4Q15 3Q15 4Q14 Staff $ 1,481 3% 4 % Ÿ Staff expense increased reflecting severance expense of approximately $55 million recorded in 4Q15 in ongoing support of our Business Improvement
Slide 17: Capital Ratios Highlights
17 Fourth Quarter 2015 – Financial Highlights Capital Ratios Highlights 12/31/15 9/30/15 12/31/14 Consolidated regulatory capital ratios:1,2 Ÿ Repurchased 10.1 million common shares for $431 million in 4Q15; 55.6 million common shares for $2.4 billion in FY15 Ÿ In 4Q15, declared a quarterly dividend
Slide 18: Capital Ratio Footnotes
18 Fourth Quarter 2015 – Financial Highlights Capital Ratio Footnotes 1 Dec. 31, 2015 regulatory capital ratios are preliminary. See the “Capital Ratios” section in the earnings release for additional detail. 2 At Dec. 31, 2015 and Sept. 30, 2015, the CET1, Tier 1 and Total risk-based consolidated r
Slide 19: Appendix
APPENDIX
Slide 20: Investment Management
20 Fourth Quarter 2015 – Financial Highlights Investment Management . Growth vs. ($ in millions) 4Q15 3Q15 4Q14 Investment management and performance fees $ 854 5% (1)% Distribution and servicing 39 5 — Other1 25 N/M N/M Net interest revenue 84 1 22 Total Revenue $ 1,002 8% 2 % Noninterest expense (
Slide 21: Investment Services
21 Fourth Quarter 2015 – Financial Highlights Investment Services Growth vs. ($ in millions) 4Q15 3Q15 4Q14 Investment services fees: Asset servicing $ 1,005 (3)% 1% Clearing services 337 (2) (3) Issuer services 199 (36) 3 Treasury services 135 — (5) Total investment services fees $ 1,676 (8) — Fore
Slide 22: Expense & Pre-Tax Operating Margin - Non-GAAP Reconciliation
22 Fourth Quarter 2015 – Financial Highlights Expense & Pre-Tax Operating Margin - Non-GAAP Reconciliation 4Q15 3Q15 4Q14 QoQ Operating Leverage YoY Operating Leverage($ in millions) Total revenue – GAAP $ 3,726 $ 3,790 $ 3,689 Less: Net income (loss) attributable to noncontrolling interests of cons
Slide 23: Expense & Pre-Tax Operating Margin - Non-GAAP Reconciliation
23 Fourth Quarter 2015 – Financial Highlights Expense & Pre-Tax Operating Margin - Non-GAAP Reconciliation 1 Income before taxes divided by total revenue. 2 Non-GAAP excludes net income (loss) attributable to noncontrolling interests of consolidated investment management funds, the gains on the sale
Slide 24: Return on Tangible Common Equity Reconciliation
24 Fourth Quarter 2015 – Financial Highlights Return on Tangible Common Equity Reconciliation 4Q15 3Q15 4Q14 FY 2015 FY 2014 ($ in millions) Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $ 637 $ 820 $ 209 $ 3,053 $ 2,494 Add: Amortization of intangibl
Slide 25: Earnings Per Share & Total Payout Reconciliation
25 Fourth Quarter 2015 – Financial Highlights Earnings Per Share & Total Payout Reconciliation Earnings per share - Quarterly Growth vs. 4Q15 3Q15 4Q14 3Q15 4Q14 GAAP results $ 0.57 $ 0.74 $ 0.18 Add: Litigation and restructuring charges 0.01 0.01 0.53 Impairment charge related to a recent court dec
Slide 26: GAAP Revenue Reconciliation
26 Fourth Quarter 2015 – Financial Highlights GAAP Revenue Reconciliation Revenue - GAAP ($ in millions) 4Q15 3Q15 4Q14 FY 2015 FY 2014 Investment services fees: Asset servicing1 $ 1,032 $ 1,057 $ 1,019 $ 4,187 $ 4,075 Clearing services 339 345 347 1,375 1,335 Issuer services 199 313 193 978 968 Tre
Slide 27: Estimated Fully Phased-In SLR - Non-GAAP Reconciliation
27 Fourth Quarter 2015 – Financial Highlights Estimated Fully Phased-In SLR1 - Non-GAAP Reconciliation ($ in millions) 12/31/152 9/30/15 12/31/14 Total estimated fully phased-in Basel III CET1 - Non-GAAP $ 16,082 $ 16,077 $ 15,931 Additional Tier 1 capital 2,530 2,528 1,550 Total Tier 1 capital $ 18
Slide 28: Pre-Tax Operating Margin – Investment Management Reconciliation
28 Fourth Quarter 2015 – Financial Highlights Pre-Tax Operating Margin – Investment Management Reconciliation 4Q15 3Q15 4Q14 ($ in millions) Income before income taxes – GAAP $ 287 $ 237 $ 236 Add: Amortization of intangible assets 24 24 29 Money market fee waivers 23 28 33 Income before income taxe
Slide 29: Investment Management and Performance Fees - Non-GAAP
29 Fourth Quarter 2015 – Financial Highlights Investment Management and Performance Fees - Non-GAAP Investment management fees - Investment Management business Growth vs. ($ in millions) 4Q15 4Q14 4Q14 Investment management fees - GAAP $ 799 $ 827 (3)% Impact of changes in foreign currency exchange
Bank of New York Mellon — Q4 2015 Earnings Presentation on 6ix