The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q3 2015 Earnings Presentation
23 slides from The Bank Of New York Mellon's earnings presentation, Oct 20, 2015
Slide 1: BNY Mellon Third Quarter 2015 Financial Highlights
BNY Mellon Third Quarter 2015 Financial Highlights October 20, 2015
Slide 2: Cautionary Statement
2 Third 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”, “co
Slide 3: Third Quarter 2015 Financial Highlights
3 Third Quarter 2015 – Financial Highlights Third Quarter 2015 Financial Highlights • Earnings per common share of $0.74 • Earnings per common share +16% on an adjusted basis1 • Generated more than 370 bps of positive operating leverage on an adjusted basis1 • Total revenue +1% on an adjusted basis1
Slide 4: Third Quarter 2015 Key Messages
4 Third Quarter 2015 – Financial Highlights Third Quarter 2015 Key Messages • Executing on our strategic priorities; delivering on our three-year financial goals set at Investor Day • Driving profitable revenue growth by deepening client relationships and maintaining pricing discipline when competin
Slide 5: Third Quarter 2015 Key Performance Drivers
5 Third Quarter 2015 – Financial Highlights Third Quarter 2015 Key Performance Drivers • Earnings per common share of $0.74, +16% on an adjusted basis1, driven by Asset Servicing, Global Collateral Services, Broker-Dealer Services and Clearing Services; market-sensitive revenue and expense control •
Slide 6: Summary Financial Results for Third Quarter 2015
6 Third Quarter 2015 – Financial Highlights Summary Financial Results for Third Quarter 2015 Growth vs. $ in millions, except per share data 3Q15 2Q15 3Q14 2Q15 3Q14 Revenue $ 3,790 $ 3,886 $ 4,611 (2)% (18)% Expenses $ 2,680 $ 2,727 $ 2,968 (2)% (10)% Income before income taxes $ 1,109 $ 1,165 $ 1,
Slide 7: Summary Financial Results for Third Quarter 2015 (Non-GAAP)
7 Third Quarter 2015 – Financial Highlights Summary Financial Results for Third Quarter 2015 (Non-GAAP)1 Growth vs. $ in millions, except per share data 3Q15 2Q15 3Q14 2Q15 3Q14 Revenue $ 3,795 $ 3,849 $ 3,752 (1)% 1 % Expenses $ 2,603 $ 2,603 $ 2,673 —% (3)% Operating leverage (140) bps 376 bps Inc
Slide 8: Fee and Other Revenue (Consolidated)
8 Third Quarter 2015 – Financial Highlights Fee and Other Revenue (Consolidated) Growth vs. Year-over-Year Drivers ($ in millions) 3Q15 2Q15 3Q14 Investment services fees: Asset Servicing Ÿ Organic growth in Global Collateral Services, Broker-Dealer Services and Asset Servicing, and net new business
Slide 9: Investment Management Metrics
9 Third Quarter 2015 – Financial Highlights Investment Management Metrics Change in Assets Under Management (AUM)1 Growth vs. $ in billions 3Q15 LTM 3Q15 2Q15 3Q14 Beginning balance of AUM $1,700 $1,620 Net inflows (outflows): Long-Term: Equity (4) (27) Fixed income (3) 2 Index (10) (10) Liability-d
Slide 10: Investment Services Metrics
10 Third Quarter 2015 – Financial Highlights Investment Services Metrics Growth vs. 3Q15 2Q15 3Q14 Assets under custody and/or administration at period end (trillions)1,2 $ 28.5 — % 1 % Estimated new business wins (AUC/A) (billions)3 $ 84 Market value of securities on loan at period end (billions)4
Slide 11: Net Interest Revenue
11 Third Quarter 2015 – Financial Highlights Net Interest Revenue Growth vs. Year-over-Year Drivers ($ in millions) 3Q15 2Q15 3Q14 Net interest revenue (non-FTE) $ 759 (3)% 5 % Net Interest Revenue Ÿ Higher securities and loans due to higher deposits Ÿ Shift out of cash Ÿ Lower interest expense on d
Slide 12: Noninterest Expense
12 Third Quarter 2015 – Financial Highlights Noninterest Expense Growth vs. Year-over-Year Drivers ($ in millions) 3Q15 2Q15 3Q14 Staff $ 1,437 — % (3)% Ÿ Lower expenses in all categories, except other expense. The lower expenses primarily reflect the favorable impact of a stronger U.S. dollar, lowe
Slide 13: Capital Ratios Highlights
13 Third Quarter 2015 – Financial Highlights Capital Ratios Highlights 9/30/15 6/30/15 12/31/14 Consolidated regulatory capital ratios:1,2 Ÿ Repurchased 15.8 million common shares for $690 million in 3Q15 Ÿ In 3Q15, declared a quarterly dividend of $0.17 per common share Ÿ Compliant with fully phase
Slide 14: Capital Ratio Footnotes
14 Third Quarter 2015 – Financial Highlights Capital Ratio Footnotes 1 Sept. 30, 2015 regulatory capital ratios are preliminary. See the “Capital Ratios” section in the earnings release for additional detail. 2 At Sept. 30, 2015 and June 30, 2015, the CET1, Tier 1 and Total risk-based consolidated r
Slide 15: Appendix
APPENDIX
Slide 16: Investment Management
16 Third Quarter 2015 – Financial Highlights Investment Management . Growth vs. ($ in millions) 3Q15 2Q15 3Q14 Investment management and performance fees $ 811 (5)% (6)% Distribution and servicing 37 (3) (8) Other1 (2) N/M N/M Net interest revenue 83 6 20 Total Revenue $ 929 (6)% (6)% Noninterest ex
Slide 17: Investment Services
17 Third Quarter 2015 – Financial Highlights Investment Services Growth vs. ($ in millions) 3Q15 2Q15 3Q14 Investment services fees: Asset servicing $ 1,031 — % 3% Clearing services 345 — 3 Issuer services 312 33 (1) Treasury services 135 (4) (3) Total investment services fees $ 1,823 4 2 Foreign ex
Slide 18: Expense & Pre-Tax Operating Margin - Non-GAAP Reconciliation
18 Third Quarter 2015 – Financial Highlights Expense & Pre-Tax Operating Margin - Non-GAAP Reconciliation 3Q15 2Q15 3Q14 ($ in millions) Total revenue – GAAP $ 3,790 $ 3,886 $ 4,611 Less: Net (loss) income attributable to noncontrolling interests of consolidated investment management funds (5) 37 23
Slide 19: Return on Tangible Common Equity Reconciliation
19 Third Quarter 2015 – Financial Highlights Return on Tangible Common Equity Reconciliation 3Q15 2Q15 3Q14 ($ in millions) Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $ 820 $ 830 $ 1,070 Add: Amortization of intangible assets, net of tax 43 44 49 N
Slide 20: Earnings Per Share & GAAP Revenue Reconciliation
20 Third Quarter 2015 – Financial Highlights Earnings Per Share & GAAP Revenue Reconciliation Earnings per share Growth vs. 3Q15 2Q15 3Q14 2Q15 3Q14 GAAP results $ 0.74 $ 0.73 $ 0.93 Add: Litigation and restructuring charges 0.01 0.03 0.16 Less: Gain on the sale of our investment in Wing Hang Bank —
Slide 21: Estimated Fully Phased-In SLR - Non-GAAP Reconciliation
21 Third Quarter 2015 – Financial Highlights Estimated Fully Phased-In SLR1 - Non-GAAP Reconciliation ($ in millions) 9/30/152 6/30/15 12/31/14 Total estimated fully phased-in Basel III CET1 - Non-GAAP $ 16,077 $ 15,931 $ 15,931 Additional Tier 1 capital 2,530 2,545 1,550 Total Tier 1 capital $ 18,6
Slide 22: Pre-Tax Operating Margin – Investment Management Reconciliation
22 Third Quarter 2015 – Financial Highlights Pre-Tax Operating Margin – Investment Management Reconciliation 3Q15 2Q15 3Q14 ($ in millions) Income before income taxes – GAAP $ 237 $ 263 $ 245 Add: Amortization of intangible assets 24 25 29 Money market fee waivers 28 29 30 Income before income taxes
Slide 23: Investment Management and Performance Fees - Non-GAAP
23 Third Quarter 2015 – Financial Highlights Investment Management and Performance Fees - Non-GAAP Investment management and performance fees - Consolidated Growth vs. ($ in millions) 3Q15 3Q14 3Q14 Investment management and performance fees - GAAP $ 829 $ 881 (6)% Impact of changes in foreign curre
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