The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Shareholder Meeting (April 2015)
35 slides from The Bank Of New York Mellon's shareholder meeting presentation, Apr 14, 2015
Slide 1: Maximizing Returns and Creating Value for Clients and Stockholders
Maximizing Returns and Creating Value for Clients and Stockholders Annual Meeting of Stockholders April 14, 2015
Slide 2: Cautionary Statement
1 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”, “continue”, “seek”, “believe”, “plan”, “goal”
Slide 3: Twin Engines of Growth
2 Twin Engines of Growth − Investment Services − Investment Management Largest investment services provider Leading market positions in every servicing business Leading global custodian with $28.5T in AUC/A $1.7T in AUM – seventh largest global asset manager; one of three largest asset manag
Slide 4: Powering Investors: Who We Are
3 NOTE: Financial data for Investment Management and Investment Services reflect FY 2014 and exclude amortization of intangible assets (Investment Services pre-tax income excludes impact of 4Q14 litigation charge). Revenue and pre-tax income are non-GAAP measures. See Appendix for a reconciliation.
Slide 5: Powering Investors - Who We Serve
4 NOTE: See additional disclosures in Appendix. Powering Investors - Delivering Innovative Investment Solutions Globally Who We Serve Institutions Investors Corporations 76% of Fortune 500 Companies 75 Central Banks, whose assets make up over 90% of global central bank reserves 67% of the Top 1,000
Slide 6: Strong Client Satisfaction Results
5 Would Recommend BNY Mellon Overall Client Satisfaction Client Executive Meets / Exceeds Expectations 94% 97% 99% Strategic Partnership 92% Innovative Solutions 90% Strong Client Satisfaction Results NOTE: Conducted two Global Client Management surveys Nov. 2014 (completed by third-party on Corpora
Slide 7: 2014 Financial Highlights
6 2014 Financial Highlights Financial Performance Growth vs. 2013 Drivers Investment Management & Performance Fees +3% AUM +8% Net AUM inflows of $47 billion Investment Services Fees +2% AUC/A +3% Estimated new business wins of $536 billion Net Interest Revenue1 (4%) Lower yields, rates No
Slide 8: Improving Financial Performance – Continued Fee Growth
7 Improving Financial Performance – Continued Fee Growth Fee Growth $MM $3,395 $3,492 $6,813 $6,942 $0 $2,000 $4,000 $6,000 $8,000 2013 2014 2013 2014 Investment Management1 Investment Services +2% $3,905 $4,075 $3,000 $3,400 $3,800 $4,200 2013 2014 Asset Servicing $1,264 $1,335 $800 $1,000 $1,200 $
Slide 9: Improving Financial Performance – Reducing Structural Costs
8 $8,000 $9,000 $10,000 $11,000 $12,000 2013 2014 Improving Financial Performance – Reducing Structural Costs Noninterest Expense1 $10,645 $MM Simplifying and automating global processes Insourcing application development Leveraging common architecture Rationalizing staffing levels Managin
Slide 10: Generating Strong Shareholder Returns Significantly Above Peers
9 Generating Strong Shareholder Returns Significantly Above Peers NOTE: G-SIB Peer Group includes: HSBC, JPM, BARC, BNP, C, DBK, BAC, CSGN, GS, ACA, MTU, MS, RBS, UBS, Bank of China, Agricultural Bank of China, BBVA, ICBC, MFG, NDA, SAN, GLE, STAN, STT, SMFG, UCG, WFC. Proxy Peers include: BLK, SCHW
Slide 11: Strategic Priorities to Drive Growth: First Quarter Update
10 Strategic Priorities to Drive Growth First Quarter Update: Achieving Our Earnings, Expense and Operating Leverage Goals Priorities Progress Driving Revenue Growth Leveraging Expertise and Scale Delivering Innovative Strategic Solutions to Clients Business Improvement Process Reducing Struct
Slide 12: Driving Revenue Growth
11 Investment Management Investment Services + Driving Revenue Growth Leveraging broad and deep client relationships Utilizing cross-platform capabilities Maintaining our strong capital position to be a safe and trusted counter- party for our clients Capitalizing on intellectual assets – deep insigh
Slide 13: Technology Powers Investors – Managing Technology as a Strategic Asset
12 Optimizing our infrastructure Storage demand up 12% 1 Demand for computing up 48% 1 Annual infrastructure cost down 6% 1 Insourcing application development Application development resources up 8% 1 Application development costs down 1% 1 Application development unit cost down 6% 1
Slide 14: Strategic Investments to Digitize BNY Mellon
13 Strategic Investments to Digitize BNY Mellon Digital Pulse Proprietary Big Data Platform Captures, stores and analyzes data from transaction processes and business events leading to: Increased Efficiency Improved Client Experience Lower Costs BXP Platform as a Service Simplified Leaner and lower
Slide 15: Technology Awards and Recognition
14 Technology Awards and Recognition Best Mobile Initiative – NETX360 and NETX Investor Mobile Waters Sell-Side Technology Model Bank in Legacy & Ecosystems Transformation Celent Best Managed Account Platform - HedgeMark HedgeWeek Asset Servicing Technology Vendor of the Year – Eagle Custody Risk Am
Slide 16: Business Improvement Process Update
15 Business Improvement Process Update Revenue Initiatives Expense Initiatives Completed Completed Created Markets Group Created direct lending capability through investment management Built separately managed accounts platform in Asia Created dedicated technology solutions unit to increase
Slide 17: Being a Strong, Safe, Trusted Counterparty
16 Being a Strong, Safe, Trusted Counterparty Our Reputation as a Sound and Safe Institution Reflects the Strength of Our Balance Sheet, Overall Liquidity and Capital Position Strong Capital Position and Returns (At 12/31/14) Basel III Common Equity Tier 1 (Non-GAAP)1 Standardized Advanced 10.6% 9.8
Slide 18: Generating Excess Capital and Deploying Capital Effectively
17 Generating Excess Capital and Deploying Capital Effectively Share Repurchases 37% ($4.8B) Dividends 22% ($2.8B) Retention 42% ($5.4B) Capital Deployment (cumulative: 2011 – 2014) Gross Capital Generation (cumulative: 2011 – 2014) $B $3.2 $7.1 $9.9 $12.9 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 2011
Slide 19: Attracting & Retaining Talent – Enhanced Leadership Team
18 Attracting & Retaining Talent – Enhanced Leadership Team CEO Chief Financial Officer Chief Human Resources Officer Apr. 2014 Chairman – EMEA CEO – Investment Management CEO – Investment Services Jun. 2014 Chief Information Officer Apr. 2012 General Counsel Apr. 2014 Chairman – APAC President Dec.
Slide 20: Added New Board Members to Complement Existing Expertise
19 Added New Board Members to Complement Existing Expertise Added Four New Members to the Board of Directors Joseph J. Echevarria – February 2, 2015 Edward P. Garden – December 2, 2014 John M. Hinshaw – September 8, 2014 Jeffrey A. Goldstein – April 18, 2014 Created the Finance Committee
Slide 21: Financial Goals – Operating Basis: 2015 Through 2017
20 Financial Goals – Operating Basis: 2015 Through 2017 Flat Normalizing Revenue Growth1 3.5 – 4.5% 6 – 8% EPS Growth1 7 – 9% 12 – 15% Return on Tangible Common Equity 17 – 19% 20 – 22% Assumptions NIM: 95 - 100 bps Operating margin: 28 – 30% Environment: no deterioration in volatility, volume, shor
Slide 22: Strategic Priorities to Drive Growth
21 Strategic Priorities to Drive Growth Driving Revenue Growth Business Improvement Process Being a Strong, Safe, Trusted Counterparty Generating Excess Capital and Deploying Capital Effectively Attracting and Retaining Top Talent Maximizing Returns and Creating Value for Clients and Stock
Slide 23: BNY MELLON | Invested
<a BNY MELLON | Invested
Slide 24: Appendix
Appendix
Slide 25: Pre-Tax Income, Noninterest Expense & Operating Leverage – Non-GAAP
24 Pre-Tax Income, Noninterest Expense & Operating Leverage – Non-GAAP ($MM) 2013 2014 Growth Rate Total revenue – GAAP $15,048 $15,692 Less: Net income attributable to noncontrolling interests of consolidated investment management funds 80 84 Gain on the sale of our investment in Wing Hang Bank - 4
Slide 26: Total Payout Ratio & Net Interest Revenue
25 Total Payout Ratio & Net Interest Revenue Total Payout Ratio ($MM) 2014 Dividends $763 Common stock repurchased 1,669 Total Capital Deployed $2,432 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $2,494 Total Payout 98% Net Interest Revenue ($MM) 201
Slide 27: Estimated Fully Phased-In Basel III CET1 Ratio - Non-GAAP
26 Estimated Fully Phased-In Basel III CET1 Ratio - Non-GAAP ($MM) 12/31/14 Total Tier 1 capital1 $ 20,502 Adjustments to determine estimated fully phased-in Basel III CET1: Intangible deduction (2,329 ) Preferred stock (1,562 ) Trust preferred securities (156 ) Other comprehensive income (loss): Se
Slide 28: Business – Revenue and Pre-Tax Income
27 Business – Revenue and Pre-Tax Income NOTE: Pre-tax metrics for Investment Services and Investment Management businesses exclude the impact of amortization of intangible assets. Revenue ($MM) 1Q14 2Q14 3Q14 4Q14 FY 2014 Investment Management $ 970 $ 1,036 $ 1,003 $ 998 $ 4,007 Investment Services
Slide 29: Capital Generation & Deployment
28 Capital Generation & Deployment Capital Generation & Deployment ($B) 2011 2012 2013 2014 Total Net Income $2.5 $2.4 $2.1 $2.6 $9.7 Other Comprehensive Income (0.3) 1.0 (0.2) (0.7) (0.2) Share Issuances (Benefit Plans) 0.3 0.3 0.5 0.6 1.7 Change in Goodwill and Intangibles 0.4 0.2 0.4 0.5 1.4 Dive
Slide 30: Disclosures
29 Disclosures All statistics are global and represent the minimum number of BNY Mellon client relationships in each category. • Fortune 500 (as of 2/23/15) // Fortune magazine, Revenue Ranking is Full Year 2013; Global 500 data • Central Banks (as of June 2013) // CIA World Factbook, IMF, annual re
Slide 31: Disclosures
30 Disclosures Broker-Dealer Services: #1 (U.S.), growing globally Leading provider of U.S. Government securities clearance services Source: Federal Reserve Bank of New York - Fedwire Securities High Volume Customer Report, March 2014 Alternative Investment Services: #1fund administrator Based on si
Slide 32: Disclosures
31 Disclosures Best Mobile Initiative – NETX360 and NETX Investor Mobile Waters Sell Side Technology: Recognized Pershing's Net360® and NetXInvestor® Mobile solutions as best for the second consecutive year in 2014. Asset Servicing Technology Vendor of the Year – Eagle Custody Risk Americas Awards:
Slide 33: Return on Tangible Common Equity – Non-GAAP
32 Return on Tangible Common Equity – Non-GAAP ($MM) 2014 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $2,494 Add: Amortization of intangible assets, net of tax 194 Net income applicable to common shareholders of The Bank of New York Mellon Corporati
Slide 34: G-SIB, CCAR and Proxy Peer Groups
33 G-SIB, CCAR and Proxy Peer Groups G-SIB Members BNY Mellon* Bank of China Bank of America Banco Bilbao Vizcaya Argentaria Barclays BNP Paribas Citigroup Credit Suisse Goldman Sachs Credit Agricole HSBC Deutsche Bank JP Morgan Chase Industrial and Commercial Bank of China Morgan Stanley Mitsubishi
Slide 35: Comprehensive Capital Analysis & Review – Severely Adverse Scenario
34 Comprehensive Capital Analysis & Review – Severely Adverse Scenario (Advanced Approach) Bank Holding Company Ticker/ Identifier Common equity tier 1 ratio (%) Actual 2014:Q3 Projected 2014:Q4 Projected 2015-16 Minimum American Express Company AXP 13.6 13.2 8.0 Bank of America Corporation BAC 12.0
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