The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Q3 2020 Earnings Presentation
20 slides from The Bank Of New York Mellon's earnings presentation, Oct 16, 2020
Slide 1: Third Quarter 2020 Financial Highlights
Third Quarter 2020 Financial Highlights October 16, 2020
Slide 2: 3Q20 Financial Highlights
3Q20 Financial Highlights Revenue EPS › Revenue relatively flat year-over-year despite low rate $3.85 billion $0.98 environment and associated money market fee waivers › Both Investment Services (“IS”) and Investment and Wealth Management (“I&WM”) benefited from market Pre-tax income Pre-tax margin
Slide 3: 3Q20 Key Financial Trends
3Q20 Key Financial Trends IS revenue I&WM revenue Noninterest expense ($ millions) ($ millions) ($ millions) 3% of increase (4)% driven by 3Q19 tax-related +4% +3% reserve reduction 3,057 3,107 2,927 2,590 2,686 2,681 Net interest revenue 761 768 681 887 886 918 Net interest 47 revenue 49 48 Total f
Slide 4: 3Q20 Financial Highlights
3Q20 Financial Highlights ($ millions, except per share data) 3Q20 2Q20 3Q19 TO TAL R E V E N U E $3,847 (4)% -% Fee revenue 3,108 (2) (1) Net interest revenue 703 (10) (4) Provision for credit losses 9 N/M N/M Noninterest expense 2,681 - 4 Income before income taxes 1,157 (2) (10) Net income applic
Slide 5: Capital and Liquidity
Capital and Liquidity 3Q20 2Q20 3Q19 Consolidated regulatory capital ratios: (a) Common Equity Tier 1 (“CET1”) ratio 13.0% 12.6% 11.1% Tier 1 capital ratio 15.7 15.4 13.2 Total capital ratio 16.6 16.3 14.0 Tier 1 leverage ratio 6.5 6.2 6.5 (b) (b) Supplementary leverage ratio (“SLR“) 8.5 8.2 6.0 Ave
Slide 6: Net Interest Revenue
Net Interest Revenue DRIVERS OF SEQUENTIAL NIR CHANGE USD LIBOR AVERAGE ($ millions) (%) 0.61 (10)% 0.36 0.25 0.16 780 + Benefit of + Day + Benefit of 1m 3m higher count, lower 703 securities hedging funding - Impact of US TREASURY AVERAGE balances and other and (%) deposit lower 0.68 and rates inte
Slide 7: Balance Sheet Trends
Balance Sheet Trends (a) AV E R A G E D E P O S I T S AV E R A G E S E C U R I T I E S ($ billions) ($ billions) +23% (1)% +29% 283 279 +6% 180 5 226 164 160 155 4.5 0.98% 33 4 140 32 127 211 212 3.5 120 (b) Non-HQLA 22 3 100 Interest-bearing 2.25% 2.5 deposits 177 (0.03)% 80 (0.05)% 2 60 1.50% 1.28
Slide 8: Credit Risk Profile
Credit Risk Profile › Well collateralized with assets under custody AV E R A G E I N T E R E S T - EARNING ASSETS ($ billions) › $1.0bn services and other; $0.7bn manufacturing; $0.2bn +22% energy and utilities › 93% exposure is investment grade -% (a) › 75% secured loans, predominantly office and r
Slide 9: Noninterest Expense
Noninterest Expense ($ millions) 3Q20 2Q20 3Q19 › Noninterest expenses up 4% year-over-year, 3% of Staff $1,466 -% (1)% which was driven by the 3Q19 tax-related reserve reduction Professional, legal and other purchased services 355 5 12 Software and equipment 340 (1) 10 › The remainder of the increa
Slide 10: Investment Services
Investment Services FINANCIAL HIGHLIGHTS ($ millions unless otherwise noted) 3Q20 2Q20 3Q19 › Asset Servicing down year-over-year primarily on lower Total revenue by line of business: interest rates, partially offset by higher client deposits and Asset Servicing $1,354 (7)% (4)% client volumes Persh
Slide 11: Investment Services - Revenue Drivers
Investment Services - Revenue Drivers ($ millions) (4)% (6)% (7)% 1,411 +4% 1,354 (5)% 575 538 466 435 312 323 293 277 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 3Q19 3Q20 ASSET ISSUER TREASURY CLEARANCE AND SERVICING PERSHING SERVICES SERVICES C O L L AT E R A L - Interest rates - Money market fee - D
Slide 12: Investment and Wealth Management
Investment and Wealth Management FINANCIAL HIGHLIGHTS ($ millions unless otherwise noted) 3Q20 2Q20 3Q19 › Investment Management up year-over-year primarily on Total revenue by line of business: the impact of hedging activities in 3Q19, higher market Investment Management $641 3% 5% values, the favo
Slide 13: Other Segment
Other Segment FINANCIAL HIGHLIGHTS ($ millions unless otherwise noted) 3Q20 2Q20 3Q19 › Fee revenue increased year-over-year primarily reflecting $11 $29 $(5) higher corporate treasury activity and equity investment Fee revenue (loss) Net securities gains (losses) 9 9 (1) income Total fee and other
Slide 14: Appendix
Ye BNY MELLON Appendix
Slide 15: Footnotes
Footnotes 3Q20 Financial Highlights, Page 4 (a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. (b) See page 17 for corresponding reconciliation of this non-GAAP measure. Capital and Liquidity, Page 5 (a) Regul
Slide 16: Money Market Fee Waiver Impact
Money Market Fee Waiver Impact ($ millions) 3Q20 2Q20 1Q20 YTD20 Investment services fees: Asset servicing fees $(1) $- $- $(1) Clearing services fees (57) (50) (9) (116) Issuer services fees (1) (1) - (2) Treasury services fees (3) (2) - (5) Total investment services fees (62) (53) (9) (124) Invest
Slide 17: Return on Common Equity and Tangible Common Equity Reconciliation
Return on Common Equity and Tangible Common Equity Reconciliation ($ millions) 3Q20 2Q20 3Q19 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $876 $901 $1,002 Add: Amortization of intangible assets 26 26 30 Less: Tax impact of amortization of intangible
Slide 18: Pre-tax Operating Margin Reconciliation – Investment and Wealth Management Business
Pre-tax Operating Margin Reconciliation – Investment and Wealth Management Business ($ millions) 3Q20 2Q20 3Q19 Income before income taxes – GAAP $245 $221 $295 Total revenue – GAAP $918 $886 $887 Less: Distribution and servicing expense 85 86 98 Adjusted total revenue, net of distribution and servi
Slide 19: Cautionary Statement
Cautionary Statement A number of statements in The Bank of New York Mellon Corporation’s (the “Corporation”) presentations, the accompanying slides and the responses to your questions are “forward-looking statements.” Words such as “estimate,” “forecast,” “project,” “anticipate,” “likely,” “target,”
Slide 20: Ye BNY MELLON
Ye BNY MELLON
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