The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q2 2017 Earnings Presentation
24 slides from The Bank Of New York Mellon's earnings presentation, Jul 20, 2017
Slide 1: BNY Mellon Second Quarter 2017 Financial Highlights
BNY Mellon Second Quarter 2017 Financial Highlights July 20, 2017
Slide 2: Cautionary Statement
2 Second Quarter 2017 – Financial Highlights Cautionary Statement A number of statements in 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”, “
Slide 3: Summary Financial Results for Second Quarter 2017 - GAAP
3 Second Quarter 2017 – Financial Highlights Summary Financial Results for Second Quarter 2017 - GAAP Growth vs. $ in millions, except per share data 2Q17 1Q17 2Q16 1Q17 2Q16 Revenue $ 3,956 $ 3,843 $ 3,776 3% 5% Expenses $ 2,655 $ 2,642 $ 2,620 —% 1% Operating leverage1 +245 bps +343 bps Income bef
Slide 4: Summary Financial Results for Second Quarter 2017 (Non-GAAP)
4 Second Quarter 2017 – Financial Highlights Summary Financial Results for Second Quarter 2017 (Non-GAAP)1 Growth vs. $ in millions, except per share data 2Q17 1Q17 2Q16 1Q17 2Q16 Revenue $ 3,953 $ 3,825 $ 3,772 3% 5% Expenses $ 2,590 $ 2,582 $ 2,554 —% 1% Adjusted operating leverage2 +304 bps +339
Slide 5: Second Quarter Financial Highlights
5 Second Quarter 2017 – Financial Highlights Second Quarter Financial Highlights (comparisons are 2Q17 versus 2Q16) Fee Revenue • Investment services fees increased +4% • Investment management and performance fees increased +6% Net Interest Revenue • Primarily driven by higher interest rates • NIM +
Slide 6: Second Quarter 2017 Key Performance Drivers
6 Second Quarter 2017 – Financial Highlights Second Quarter 2017 Key Performance Drivers (comparisons are 2Q17 versus 2Q16) • Earnings per common share of $0.88, +17%, driven by strength in investment services fees, net interest revenue, investment management and performance fees and continued execu
Slide 7: Fee and Other Revenue (Consolidated)
7 Second Quarter 2017 – Financial Highlights Fee and Other Revenue (Consolidated) Growth vs. Year-over-Year Drivers ($ in millions) 2Q17 1Q17 2Q16 Investment services fees: Asset ServicingŸ Primarily reflecting net new business, including growth of collateral management solutions and higher equity m
Slide 8: Investment Management Metrics
8 Second Quarter 2017 – Financial Highlights Investment Management Metrics Change in Assets Under Management (AUM)1,2 Growth vs. ($ in billions) 2Q17 LTM 2Q17 1Q17 2Q16 Beginning balance of AUM $1,727 $1,664 Net inflows (outflows): Long-term strategies: Equity (2) (17) Fixed income 2 2 Liability-dri
Slide 9: Investment Services Metrics
9 Second Quarter 2017 – Financial Highlights Investment Services Metrics Growth vs. 2Q17 1Q17 2Q16 Assets under custody and/or administration at period end (trillions)1,2 $ 31.1 2 % 5 % Estimated new business wins (AUC/A) (billions)1 $ 152 Market value of securities on loan at period end (billions)3
Slide 10: Net Interest Revenue
10 Second Quarter 2017 – Financial Highlights Net Interest Revenue Growth vs. Year-over-Year Drivers ($ in millions) 2Q17 1Q17 2Q16 Net interest revenue - GAAP $ 826 4% 8 % Net Interest Revenue Ÿ Primarily reflects higher interest rates and lower premium amortization, partially offset by lower inter
Slide 11: Noninterest Expense
11 Second Quarter 2017 – Financial Highlights Noninterest Expense Growth vs. Year-over-Year Drivers ($ in millions) 2Q17 1Q17 2Q16 Staff $ 1,417 (4)% —% Ÿ Higher professional, legal and other purchased services, software and litigation expenses, partially offset by the impact of a stronger U.S. doll
Slide 12: Capital Ratios Highlights
12 Second Quarter 2017 – Financial Highlights Capital Ratios Highlights06/30/17 03/31/17 12/31/16 Consolidated regulatory capital ratios:1 Ÿ Repurchased 11 million common shares for $506 million and paid $199 million in dividends to common shareholders in 2Q17 Ÿ Supplementary Leverage Ratio (“SLR”)
Slide 13: Capital Ratio Footnotes
13 Second Quarter 2017 – Financial Highlights Capital Ratio Footnotes 1 June 30, 2017 regulatory capital ratios are preliminary. See the “Capital Ratios” section in the earnings release for additional detail. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under t
Slide 14: Appendix
Appendix
Slide 15: 2017 Key Messages
15 Second Quarter 2017 – Financial Highlights 2017 Key Messages • Executing on our strategic priorities; delivering on our three-year financial goals set at our 2014 Investor Day • Focused on enhancing the client experience and driving profitable revenue growth • Streamlining systems and centralizin
Slide 16: Strategic Priorities
16 Second Quarter 2017 – Financial Highlights Strategic Priorities Strategic Priorities to Drive Growth Driving Profitable Revenue Growth and Enhancing the Client Experience • Leveraging our scale and expertise to create increased value for clients and shareholders through all environments • In IM,
Slide 17: Business Improvement Process
17 Second Quarter 2017 – Financial Highlights Business Improvement Process COMPLETED • Expanded Wealth Management sales force, driving new revenue opportunities backed by a strong pipeline • Delivered revised pricing transactions initiated through manual processes to better align costs with client p
Slide 18: Investment Management
18 Second Quarter 2017 – Financial Highlights Investment Management . Growth vs. ($ in millions) 2Q17 1Q17 2Q16 Investment management and performance fees $ 862 4% 6% Distribution and servicing 53 2 8 Other1 (16) N/M N/M Net interest revenue 87 1 6 Total Revenue 986 2 5 Provision for credit losses —
Slide 19: Investment Services
19 Second Quarter 2017 – Financial Highlights Investment Services Growth vs. ($ in millions) 2Q17 1Q17 2Q16 Investment services fees: Asset servicing $ 1,061 2% 2% Clearing services 393 5 12 Issuer services 241 (4) 3 Treasury services 139 — 1 Total investment services fees 1,834 2 4 Foreign exchange
Slide 20: Expense, Pre-Tax Operating Margin & Operating Leverage - Non-GAAP Reconciliations
20 Second Quarter 2017 – Financial Highlights Expense, Pre-Tax Operating Margin & Operating Leverage - Non-GAAP Reconciliations 2Q17 1Q17 2Q16 Growth vs. ($ in millions) 1Q17 2Q16 Total revenue – GAAP $ 3,956 $ 3,843 $ 3,776 2.94% 4.77% Less: Net income attributable to noncontrolling interests of co
Slide 21: Return on Common Equity and Tangible Common Equity Reconciliation
21 Second Quarter 2017 – Financial Highlights Return on Common Equity and Tangible Common Equity Reconciliation 2Q17 1Q17 2Q16 ($ in millions) Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $ 926 $ 880 $ 825 Add: Amortization of intangible assets 53 52
Slide 22: Basel III Capital Components & Ratios
22 Second Quarter 2017 – Financial Highlights Basel III Capital Components & Ratios 1 Preliminary. 2 Reflects transitional adjustments to CET1, Tier 1 capital and Tier 2 capital required under the U.S. capital rules. 3 Estimated. ($ in millions) 06/30/171 03/31/17 12/31/16 Transitional basis2 Fully
Slide 23: Supplementary Leverage Ratio
23 Second Quarter 2017 – Financial Highlights Supplementary Leverage Ratio ($ in millions) 06/30/17 1 03/31/17 12/31/16 Transitional basis Fully phased-in (Non-GAAP)2 Transitional basis Fully phased-in (Non-GAAP)2 Transitional basis Fully phased-in (Non-GAAP)2 Consolidated: Tier 1 capital $ 21,869 $
Slide 24: Investment Management Pre-Tax Operating Margin - Non-GAAP Reconciliation
24 Second Quarter 2017 – Financial Highlights Investment Management Pre-Tax Operating Margin - Non-GAAP Reconciliation Pre-tax operating margin 2Q17 1Q17 2Q16 ($ in millions) Income before income taxes – GAAP $ 288 $ 277 $ 234 Add: Amortization of intangible assets 15 15 19 Provision for credit loss
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