The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q4 2018 Earnings Presentation
19 slides from The Bank Of New York Mellon's earnings presentation, Jan 16, 2019
Slide 1: BNY Mellon Fourth Quarter 2018 Financial Highlights
BNY Mellon Fourth Quarter 2018 Financial Highlights January 16, 2019
Slide 2: 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,
Slide 3: Financial Highlights
Financial Highlights • Fourth quarter GAAP earnings of $832 million, or $0.84 per common share, down 22% ◦ Notable items impacted both the fourth quarter of 2018 and 2017 ($ in millions, except per Revenue Expense Net Income EPS share data) 4Q18 $ — $ 269 $ (155) $ (0.16) 4Q17 $ (320) $ 282 $ 181 $
Slide 4: Fourth Quarter 2018 - GAAP Financial Highlights
Fourth Quarter 2018 - GAAP Financial Highlights Growth vs. Financial Performance Drivers ($ in millions, except per share data) 4Q18 3Q18 4Q17 year-over-year Total revenue $ 4,007 (2)% 7% • Fee revenue, up 9% Fee revenue 3,146 (1) 9 ◦ Primarily reflecting notable items Net interest revenue 885 (1) 4
Slide 5: Fourth Quarter 2018 - Non-GAAP Financial Highlights
Fourth Quarter 2018 - Non-GAAP Financial Highlights Growth vs. Financial Performance Drivers ($ in millions, except per share data) 4Q18 4Q17 year-over-year Total revenue $ 4,007 (1)% • Fee revenue, down 1% Fee revenue 3,146 (1) ◦ Primarily reflecting lower investment Net interest revenue 885 4 mana
Slide 6: Full Year 2018 - GAAP Financial Highlights
Full Year 2018 - GAAP Financial Highlights Growth vs. Financial Performance Drivers ($ in millions, except per share data) FY18 FY17 year-over-year Total revenue $ 16,392 5% • Fee revenue, up 6% Fee revenue 12,842 6 ◦ Primarily reflecting the notable items Net interest revenue 3,611 9 recorded in 4Q
Slide 7: Full Year 2018 - Non-GAAP Financial Highlights
Full Year 2018 - Non-GAAP Financial Highlights Growth vs. Financial Performance Drivers ($ in millions, except per share data) FY18 FY17 year-over-year Total revenue $ 16,405 3% • Fee revenue up 3% Fee revenue 12,855 3 ◦ Primarily reflecting growth in collateral Net interest revenue 3,611 9 manageme
Slide 8: Investment Services Business Highlights
Investment Services Business Highlights Growth vs. Business Performance Drivers Financial Highlights ($ millions) 4Q18 3Q18 4Q17 year-over-year Total revenue by line of business: • Asset Servicing, down 2% Asset Servicing $ 1,435 (2)% (2)% ◦ Primarily reflects lower client assets and activity and th
Slide 9: Investment Management Business Highlights
Investment Management Business Highlights Growth vs. Business Performance Drivers Financial Highlights ($ millions) 4Q18 3Q18 4Q17 year-over-year Total revenue by line of business: • Asset Management, down 11% Asset Management $ 660 (6)% (11)% ◦ Primarily reflects the impact of net outflows, lower e
Slide 10: Other Segment
Other Segment 4Q18 3Q18 4Q17 Business Performance Drivers Financial Highlights ($ millions) year-over-year Fee revenue (loss) $ 29 $ 7 $ (221) • Fee revenue increased primarily reflecting the impact of Net securities (losses) — — (26) U.S. tax legislation on our renewable energy Total fee and other
Slide 11: Capital and Liquidity
Capital and Liquidity Dec. 31, 2018 Sept. 30, 2018 Dec. 31, 2017 Consolidated regulatory capital ratios: (a) fully phased-in (b) CET1 ratio 10.6% 11.2% 10.3% Tier 1 capital ratio 12.7 13.3 12.3 Total capital ratio 13.5 14.1 13.0 Tier 1 leverage ratio 6.6 7.0 6.4 Supplementary leverage ratio (“SLR”)
Slide 12: Noninterest Expense
Noninterest Expense Growth vs. Financial Performance Drivers ($ in millions) 4Q18 3Q18 4Q17 year-over-year Staff $ 1,602 8% (2)% • Noninterest expense, down 1% Professional, legal and other purchased services 383 15 13 • Excluding notable items, noninterest Software and equipment 300 15 1 expense do
Slide 13: Appendix
Appendix
Slide 14: Footnotes
Footnotes Fourth Quarter 2018 - GAAP Financial Highlights, Page 4 (a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. (b) Regulatory capital ratios for Dec. 31, 2018 are preliminary. For our CET1, Tier 1 capita
Slide 15: Fourth Quarter Results - Impact of Notable Items
Fourth Quarter Results - Impact of Notable Items 4Q18 4Q17 4Q18 vs. 4Q17 Results - Notable Results - Results - Notable Results - Non- GAAP items(a) Non- GAAP Items(b) Non- GAAP GAAP ($ in millions, except per share data) GAAP GAAP Fee revenue $ 3,146 $ — $ 3,146 $ 2,886 $ (279) $ 3,165 9 % (1)% Net
Slide 16: Fourth Quarter Impact of Notable Items - Business Segments
Fourth Quarter Impact of Notable Items - Business Segments Business Segments 4Q18 4Q17 Investment Investment Investment Investment (a) Other Total (a) Other Total ($ in millions) Management Services Management Services Fee and other revenue $ — $ — $ — $ — $ — $ — $ (316) $ (316) Net interest revenu
Slide 17: Full Year Results - Impact of Notable Items
Full Year Results - Impact of Notable Items FY18 FY17 FY18 vs FY17 Results - Notable Results Results - Notable Results Non- GAAP items(a) Non- GAAP items(b) Non- GAAP GAAP ($ in millions, except per share data) GAAP GAAP Fee revenue $ 12,842 $ (13) $ 12,855 $ 12,162 $ (279) $ 12,441 6% 3% Net securi
Slide 18: Return on Common Equity and Tangible Common Equity Reconciliation
Return on Common Equity and Tangible Common Equity Reconciliation 4Q18 3Q18 4Q17 FY18 FY17 ($ in millions) Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $ 832 $ 1,075 $ 1,126 $ 4,097 $ 3,915 Add: Amortization of intangible assets 35 48 52 180 209 Less
Slide 19: Pre-tax Operating Margin Reconciliation - Investment Management Business
Pre-tax Operating Margin Reconciliation - Investment Management Business 4Q18 3Q18 4Q17 ($ in millions) Income before income taxes – GAAP $ 247 $ 316 $ 276 Total revenue – GAAP $ 963 $ 1,015 $ 1,048 Less: Distribution and servicing expense 95 99 107 Adjusted total revenue, net of distribution and se
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