The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q1 2019 Earnings Presentation
16 slides from The Bank Of New York Mellon's earnings presentation, Apr 17, 2019
Slide 1: First Quarter 2019 Financial Highlights
First Quarter 2019 Financial Highlights April 17, 2019
Slide 2: 1Q19 Financial Results
Profits • Net Income $910 million, (20)% y/y • Diluted EPS $0.94, (15)% y/y Returns • ROE: X.X% 1Q19 Financial Results • ROTCE: XX.X% • Returns XYZ to shareholders Profits Returns Balance Sheet • ROE: 10.0% • Net income: $910 million • CET1: 11.0% • ROTCE: 20.7% (a) Balance Sheet • Diluted EPS: $0.9
Slide 3: Delivering Progress on Our Priorities
Delivering Progress on Our Priorities • Strong demand for offering in U.S. and UK Pershing Asset Servicing • Accelerating investments in RIA servicing and Markets • Launching new platform for CLO and traditional loan products as • Alliance with BlackRock Issuer Services well as improved client repor
Slide 4: Financial Highlights
Financial Highlights Growth vs. (a) Performance Commentary ($ millions) 1Q19 4Q18 1Q18 year-over-year Total revenue $3,899 (3)% (7)% • Fee revenue, down 9%, primarily reflects ◦ Adverse impact of currency, cumulative Fee revenue 3,031 (4) (9) AUM outflows during 2018 and Net interest revenue 841 (5)
Slide 5: Capital and Liquidity
Capital and Liquidity Performance Commentary 1Q19 4Q18 1Q18 year-over-year Consolidated regulatory capital ratios: (a) • Strong capital and shareholder returns Common Equity Tier 1 (“CET1”) ratio 11.0% 10.7% 10.7% • In compliance with the new TLAC ratio requirements Tier 1 capital ratio 13.1 12.8 12
Slide 6: Net Interest Revenue
Net Interest Revenue Net Interest Revenue and Net Interest Margin Performance Commentary ($ millions) year-over-year (8)% • Lower deposits 919 885 841 ◦ Noninterest-bearing declined ◦ 1Q18 deposits were elevated 1.22% 1.24% 1.20% • Lower loans driven by lower client activity • Higher deposit rates •
Slide 7: Noninterest Expense
Noninterest Expense Growth vs. Performance Commentary ($ millions) 1Q19 4Q18 1Q18 year-over-year Staff $1,524 (5)% (3)% • Noninterest expense, down 1%; stronger dollar had a Professional, legal and other purchased favorable impact of approximately 1% 325 (15) 12 services Software and equipment 283 (
Slide 8: Investment Services
Investment Services Growth vs. Performance Commentary Financial Highlights ($ millions) 1Q19 4Q18 1Q18 year-over-year Total revenue by line of business: Asset Servicing $1,407 (2)% (7)% • Asset Servicing, down 7% on lower foreign exchange Pershing 554 (1) (5) revenue, net interest revenue, lower cli
Slide 9: Investment Services - Revenue Drivers
Investment Services - Revenue Drivers ($ millions) (7)% (5)% 1,519 581 (5)% 1,407 554 (1)% 418 396 8% 321 317 255 276 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 1Q18 1Q19 Asset Servicing Pershing Issuer Services Treasury Services Clearance and Collateral - FX volumes and + New clients + Volumes in + In
Slide 10: Investment Management
Investment Management Growth vs. Performance Commentary Financial Highlights ($ millions) 1Q19 4Q18 1Q18 year-over-year Total revenue by line of business: Asset Management $637 (3)% (17)% • Asset Management, down 17% with almost half of the Wealth Management 302 — (5) decrease driven by the impact o
Slide 11: Other Segment
Other Segment Performance Commentary ($ millions) 1Q19 4Q18 1Q18 year-over-year Fee revenue $29 $29 $57 • Fee revenue decreased primarily reflecting asset- Net securities gains (losses) 1 — (49) related gains recorded in 1Q18 Total fee and other revenue 30 29 8 Net interest (expense) (30) (15) (1) •
Slide 12: Appendix
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Slide 13: Footnotes
Footnotes 1Q19 Financial Results - Page 2 (a) Quarterly returns are annualized. See the Appendix for reconciliation of this non-GAAP measure. (b) Includes a net charge of $155 million, or $(0.16) per diluted common share, related to severance, expenses associated with consolidating real estate and l
Slide 14: Return on Common Equity and Tangible Common Equity Reconciliation
Return on Common Equity and Tangible Common Equity Reconciliation ($ millions) 1Q19 4Q18 1Q18 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $910 $832 $1,135 Add: Amortization of intangible assets 29 35 49 Less: Tax impact of amortization of intangible
Slide 15: Pre-tax Operating Margin Reconciliation - Investment Management Business
Pre-tax Operating Margin Reconciliation - Investment Management Business 1Q19 4Q18 1Q18 ($ millions) Income before income taxes – GAAP $269 $247 $381 Total revenue – GAAP $939 $963 $1,088 Less: Distribution and servicing expense 91 95 110 Adjusted total revenue, net of distribution and servicing exp
Slide 16: Cautionary Statement
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,” “likely,” “target,” “expect,” “intend,” “continue,” “seek,” “believe,” “plan,
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