The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q3 2016 Earnings Presentation
25 slides from The Bank Of New York Mellon's earnings presentation, Oct 20, 2016
Slide 1: BNY Mellon Third Quarter 2016 Financial Highlights
BNY Mellon Third Quarter 2016 Financial Highlights October 20, 2016
Slide 2: Cautionary Statement
2 Third Quarter 2016 – 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”, “b
Slide 3: Summary Financial Results for Third Quarter 2016 - GAAP
3 Third Quarter 2016 – Financial Highlights Summary Financial Results for Third Quarter 2016 - GAAP Growth vs. $ in millions, except per share data 3Q16 2Q16 3Q15 2Q16 3Q15 Revenue $ 3,941 $ 3,776 $ 3,790 4% 4 % Expenses $ 2,643 $ 2,620 $ 2,680 1% (1)% Operating leverage1 349 bps 536 bps Income befo
Slide 4: Summary Financial Results for Third Quarter 2016 (Non-GAAP)
4 Third Quarter 2016 – Financial Highlights Summary Financial Results for Third Quarter 2016 (Non-GAAP)1 Growth vs. $ in millions, except per share data 3Q16 2Q16 3Q15 2Q16 3Q15 Revenue $ 3,932 $ 3,772 $ 3,795 4% 4 % Expenses $ 2,564 $ 2,554 $ 2,603 —% (1)% Adjusted operating leverage2 385 bps 511 b
Slide 5: Third Quarter Financial Highlights
5 Third Quarter 2016 – Financial Highlights Third Quarter Financial Highlights (comparisons are 3Q16 versus 3Q15) • Earnings per common share of $0.90 on an adjusted basis1 • Earnings per common share +22% on an adjusted basis1 • Total revenue of $3.94 billion • Fee and other revenue +3% • Net inter
Slide 6: 2016 Key Messages
6 Third Quarter 2016 – Financial Highlights 2016 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 ◦ Broadening existing client relationshi
Slide 7: Third Quarter 2016 Key Performance Drivers
7 Third Quarter 2016 – Financial Highlights Third Quarter 2016 Key Performance Drivers (comparisons are 3Q16 versus 3Q15) • Earnings per common share of $0.90, +22% on an adjusted basis1 (Non-GAAP), driven by strength in investment management and performance fees, net interest revenue, issuer servic
Slide 8: Fee and Other Revenue (Consolidated)
8 Third Quarter 2016 – Financial Highlights Fee and Other Revenue (Consolidated) Growth vs. Year-over-Year Drivers ($ in millions) 3Q16 2Q16 3Q15 Investment services fees: Asset ServicingŸ Higher money market fees and securities lending revenue, partially offset by the unfavorable impact of a strong
Slide 9: Investment Management Metrics
9 Third Quarter 2016 – Financial Highlights Investment Management Metrics Change in Assets Under Management (AUM)1 Growth vs. ($ in billions) 3Q16 LTM 3Q16 2Q16 3Q15 Beginning balance of AUM $1,664 $1,625 Net inflows (outflows): Long-Term: Equity (3) (17) Fixed income — (1) Liability-driven investme
Slide 10: Investment Services Metrics
10 Third Quarter 2016 – Financial Highlights Investment Services Metrics Growth vs. 3Q16 2Q16 3Q15 Assets under custody and/or administration at period end (trillions)1,2 $ 30.5 3 % 7 % Estimated new business wins (AUC/A) (billions)2 $ 150 Market value of securities on loan at period end (billions)3
Slide 11: Net Interest Revenue
11 Third Quarter 2016 – Financial Highlights Net Interest Revenue Growth vs. Year-over-Year Drivers ($ in millions) 3Q16 2Q16 3Q15 Net interest revenue (non-FTE) $ 774 1 % 2 % Net Interest Revenue Ÿ Actions we have taken to reduce the levels of our lower yielding interest-earning assets and higher y
Slide 12: Noninterest Expense
12 Third Quarter 2016 – Financial Highlights Noninterest Expense Growth vs. Year-over-Year Drivers ($ in millions) 3Q16 2Q16 3Q15 Staff $ 1,467 4% 2 % Ÿ Lower expenses in most categories, primarily driven by the favorable impact of a stronger U.S. dollar, lower other, software and equipment, legal,
Slide 13: Capital Ratios Highlights
13 Third Quarter 2016 – Financial Highlights Capital Ratios Highlights 9/30/16 6/30/16 12/31/15 Consolidated regulatory capital ratios:1 Ÿ Repurchased 11.6 million common shares for $464 million in 3Q16 Ÿ In 3Q16, declared a quarterly dividend of $0.19 per common share Ÿ Compliant with fully phased-
Slide 14: Capital Ratio Footnotes
14 Third Quarter 2016 – Financial Highlights Capital Ratio Footnotes 1 Sept. 30, 2016 regulatory capital ratios are preliminary. See the “Capital Ratios” section in the earnings release for additional detail. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under t
Slide 15: Appendix
APPENDIX
Slide 16: Strategic Priorities
16 Third Quarter 2016 – Financial Highlights Strategic Priorities Strategic Priorities to Drive Growth Driving Profitable Revenue Growth • Leveraging our scale and expertise to create new sources of value • Delivering innovative strategic solutions with strong potential upside • In Investment Servic
Slide 17: Business Improvement Process
17 Third Quarter 2016 – Financial Highlights Business Improvement Process COMPLETED • Expanded Wealth Management sales force, driving new revenue opportunities backed by a strong pipeline • Established Client Pricing Strategy group to develop, analyze and measure service delivery costs to better ali
Slide 18: Total Shareholder Return and EPS Reconciliation
18 Third Quarter 2016 – Financial Highlights Total Shareholder Return and EPS Reconciliation Total Shareholder Return YTD 9/30/16 2015 2014 BNY Mellon (1.9)% 3.3% 18.3% 11-Member Peer Group Median 2.5% (2.3)% 13.8% S&P 500 Financials 1.4% (1.6)% 15.2% S&P 500 Index 7.8% 1.4% 13.7% Earnings per share
Slide 19: Investment Management
19 Third Quarter 2016 – Financial Highlights Investment Management . Growth vs. ($ in millions) 3Q16 2Q16 3Q15 Investment management and performance fees $ 845 3% 4% Distribution and servicing 49 — 32 Other1 (18) N/M N/M Net interest revenue 82 — (1) Total Revenue 958 2 3 Noninterest expense (ex. am
Slide 20: Investment Services
20 Third Quarter 2016 – Financial Highlights Investment Services Growth vs. ($ in millions) 3Q16 2Q16 3Q15 Investment services fees: Asset servicing $ 1,039 — % —% Clearing services 347 (1) 1 Issuer services 336 44 8 Treasury services 136 (1) 1 Total investment services fees 1,858 5 2 Foreign exchan
Slide 21: Expense, Pre-Tax Operating Margin & Operating Leverage - Non-GAAP Reconciliations
21 Third Quarter 2016 – Financial Highlights Expense, Pre-Tax Operating Margin & Operating Leverage - Non-GAAP Reconciliations 3Q16 2Q16 3Q15 Growth vs. ($ in millions) 2Q16 3Q15 Total revenue – GAAP $ 3,941 $ 3,776 $ 3,790 4.37% 3.98 % Less: Net income (loss) attributable to noncontrolling interest
Slide 22: Return on Tangible Common Equity Reconciliation
22 Third Quarter 2016 – Financial Highlights Return on Tangible Common Equity Reconciliation 3Q16 2Q16 3Q15 ($ in millions) Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $ 974 $ 825 $ 820 Add: Amortization of intangible assets 61 59 66 Less: Tax impac
Slide 23: Basel III Capital Components & Ratios
23 Third Quarter 2016 – Financial Highlights Basel III Capital Components & Ratios ($ in millions) 9/30/161 6/30/16 12/31/15 Transitional basis2 Fully Phased-inNon-GAAP3 Transitional basis 2 Fully Phased-in Non-GAAP3 Transitional basis 2 Fully Phased-in Non-GAAP3 CET1: Common shareholders’ equity $
Slide 24: SLR
24 Third Quarter 2016 – Financial Highlights SLR ($ in millions) 9/30/16 1 6/30/16 12/31/15 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 $ 21,943 $ 20,592 $ 20,668 $ 19,315 $
Slide 25: Investment Management - Non-GAAP Reconciliation
25 Third Quarter 2016 – Financial Highlights Investment Management - Non-GAAP Reconciliation Pre-tax operating margin 3Q16 2Q16 3Q15 ($ in millions) Income before income taxes – GAAP $ 256 $ 234 $ 236 Add: Amortization of intangible assets 22 19 24 Provision for credit losses — 1 1 Money market fee
Bank of New York Mellon — Q3 2016 Earnings Presentation on 6ix