The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q2 2015 Earnings Presentation
23 slides from The Bank Of New York Mellon's earnings presentation, Jul 21, 2015
Slide 1: BNY Mellon Second Quarter 2015 Financial Highlights
BNY Mellon Second Quarter 2015 Financial Highlights July 21, 2015
Slide 2: Cautionary Statement
2 Second 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: Second Quarter 2015 Financial Highlights
3 Second Quarter 2015 – Financial Highlights Second Quarter 2015 Financial Highlights • Earnings per common share of $0.73, including: • $0.03 per common share related to previously announced litigation expense and restructuring charges • Earnings per common share +24% on an adjusted basis1 • Total
Slide 4: Second Quarter 2015 Key Messages
4 Second Quarter 2015 – Financial Highlights Second Quarter 2015 Key Messages • Solid execution of strategic priorities; delivering on our three-year financial goals set at Investor Day • Generated strong operating leverage and improved operating margin by executing on revenue growth initiatives and
Slide 5: Second Quarter 2015 Key Performance Drivers
5 Second Quarter 2015 – Financial Highlights Second Quarter 2015 Key Performance Drivers • Earnings per common share on an adjusted basis1 of $0.77, +24%, driven by Asset Servicing, especially Global Collateral Services; Clearing Services; market-sensitive revenue and expense control • Investment ma
Slide 6: Summary Financial Results for Second Quarter 2015
6 Second Quarter 2015 – Financial Highlights Summary Financial Results for Second Quarter 2015 Growth vs. $ in millions, except per share data 2Q15 1Q15 1 2Q14 2Q14 1Q15 Revenue $ 3,886 $ 3,792 $ 3,745 4 % 2 % Expenses $ 2,727 $ 2,700 $ 2,946 (7 )% 1 % Income before income taxes $ 1,165 $ 1,090 $ 81
Slide 7: Summary Financial Results for Second Quarter 2015 (Non-GAAP)
7 Second Quarter 2015 – Financial Highlights Summary Financial Results for Second Quarter 2015 (Non-GAAP)1 Growth vs. $ in millions, except per share data 2Q15 1Q15 2 2Q14 2Q14 1Q15 Revenue $ 3,849 $ 3,761 $ 3,728 3% 2 % Expenses $ 2,603 $ 2,637 $ 2,640 (1)% (1 )% Operating leverage 464 bps 363 bps
Slide 8: Fee and Other Revenue (Consolidated)
8 Second Quarter 2015 – Financial Highlights Fee and Other Revenue (Consolidated) Growth vs. Year-over-Year Drivers ($ in millions) 2Q15 2Q14 1Q15 Investment services fees: Asset Servicing Organic growth and net new business, partially offset by a stronger U.S. dollar Clearing Services Higher mu
Slide 9: Investment Management Metrics
9 Second Quarter 2015 – Financial Highlights Investment Management Metrics Change in Assets Under Management (AUM)1 Growth vs. $ in billions 2Q15 LTM 2Q15 2Q14 1Q15 Beginning balance of AUM $1,741 $1,636 Net inflows (outflows): Long-Term: Equity (12 ) (24 ) Fixed income (2 ) 6 Index (9 ) (3 ) Liabil
Slide 10: Investment Services Metrics
10 Second Quarter 2015 – Financial Highlights Investment Services Metrics Growth vs. 2Q15 2Q14 1Q15 Assets under custody and/or administration at period end (trillions)1,2 $ 28.6 — % — % Market value of securities on loan at period end (billions)3 $ 283 1 % (3 )% Average loans (millions) $ 38,264 16
Slide 11: Net Interest Revenue
11 Second Quarter 2015 – Financial Highlights Net Interest Revenue Growth vs. Year-over-Year Drivers ($ in millions) 2Q15 2Q14 1Q15 Net interest revenue (non-FTE) $ 779 8 % 7 % Net Interest Revenue Higher securities and loans due to increase in deposits and the shift out of cash, lower interest ex
Slide 12: Noninterest Expense
12 Second Quarter 2015 – Financial Highlights Noninterest Expense Growth vs. Year-over-Year Drivers ($ in millions) 2Q15 2Q14 1Q15 Staff $ 1,434 — % (3 )% Lower expenses in all categories (except business development), the favorable impact of a stronger U.S. dollar and the benefit of the business
Slide 13: Capital Ratios Highlights
13 Second Quarter 2015 – Financial Highlights Capital Ratios Highlights 6/30/15 3/31/15 12/31/14 Consolidated regulatory capital ratios:1,2,3 Repurchased 19.4 million common shares for $834 million in 2Q15 In 2Q15, declared a quarterly dividend of $0.17 per common share Issued $1 billion of qu
Slide 14: Capital Ratio Footnotes
14 Second Quarter 2015 – Financial Highlights Capital Ratio Footnotes 1 June 30, 2015 regulatory capital ratios are preliminary. See the “Capital Ratios” section in the earnings release for additional detail. 2 Capital ratios for the first quarter of 2015 were revised to reflect the retrospective ap
Slide 15: Appendix
APPENDIX
Slide 16: Investment Management
16 Second Quarter 2015 – Financial Highlights Investment Management . Growth vs. ($ in millions) 2Q15 2Q14 1Q15 Investment management and performance fees $ 864 (2 )% 2 % Distribution and servicing 37 (10 ) (5 ) Other1 25 N/M N/M Net interest revenue 78 18 5 Total Revenue $ 1,004 (3 )% (1 )% Noninte
Slide 17: Investment Services
17 Second Quarter 2015 – Financial Highlights Investment Services Growth vs. ($ in millions) 2Q15 2Q14 1Q15 Investment services fees: Asset servicing $ 1,035 4 % 2 % Clearing services 346 7 1 Issuer services 234 1 1 Treasury services 141 1 4 Total investment services fees $ 1,756 4 2 Foreign exchang
Slide 18: Expense & Pre-Tax Operating Margin - Non-GAAP Reconciliation
18 Second Quarter 2015 – Financial Highlights Expense & Pre-Tax Operating Margin - Non-GAAP Reconciliation 2Q15 1Q15 2Q14 ($ in millions) Total revenue – GAAP $ 3,886 $ 3,792 $ 3,745 Less: Net income attributable to noncontrolling interests of consolidated investment management funds 37 31 17 Total
Slide 19: Return on Tangible Common Equity Reconciliation
19 Second Quarter 2015 – Financial Highlights Return on Tangible Common Equity Reconciliation 2Q15 1Q15 2Q14 ($ in millions) Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $ 830 $ 766 $ 554 Add: Amortization of intangible assets, net of tax 44 43 49 Ne
Slide 20: Earnings Per Share & GAAP Revenue Reconciliation
20 Second Quarter 2015 – Financial Highlights Earnings Per Share & GAAP Revenue Reconciliation Earnings per share Growth vs. ($ in dollars) 2Q15 1Q15 2Q14 2Q14 1Q15 GAAP results $ 0.73 $ 0.67 $ 0.48 Add: Litigation and restructuring charges 0.03 — 0.06 Charge related to investment management funds,
Slide 21: Estimated Fully Phased-In SLR - Non-GAAP Reconciliation
21 Second Quarter 2015 – Financial Highlights Estimated Fully Phased-In SLR1 - Non-GAAP Reconciliation ($ in millions) 6/30/152 3/31/15 12/31/14 Total estimated fully phased-in Basel III CET1 - Non-GAAP $ 15,931 $ 16,123 $ 15,931 Additional Tier 1 capital 2,545 1,560 1,550 Total Tier 1 capital $ 18,
Slide 22: Pre-Tax Operating Margin – Investment Management Reconciliation
22 Second Quarter 2015 – Financial Highlights Pre-Tax Operating Margin – Investment Management Reconciliation 2Q15 1Q15 2Q14 ($ in millions) Income before income taxes – GAAP $ 265 $ 264 $ 171 Add: Amortization of intangible assets 25 25 31 Money market fee waivers 29 34 28 Charge related to investm
Slide 23: Investment Management and Performance Fees - Non-GAAP
23 Second Quarter 2015 – Financial Highlights Investment Management and Performance Fees - Non-GAAP Investment management and performance fees - Consolidated Growth vs. ($ in millions) 2Q15 2Q14 2Q14 Investment management and performance fees - GAAP $ 878 $ 883 (1 )% Impact of changes in foreign cur
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