The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Q1 2020 Earnings Presentation
21 slides from The Bank Of New York Mellon's earnings presentation, Apr 16, 2020
Slide 1: First Quarter 2020 Financial Highlights
First Quarter 2020 Financial Highlights April 16, 2020
Slide 2: Management Priorities in Response to Coronavirus Impact
Management Priorities in Response to Coronavirus Impact » Support well-being of employees and communities during challenging time Employees » Early and successful initiation of our business continuity plans » Significant majority of global workforce working remotely » Operationally resilient Clients
Slide 3: Resilient During Volatile Markets
Resilient During Volatile Markets » Performs relatively well under stress Attractive » Client base of leading institutional clients, governments, endowments and pension funds business model » Diversified and stable business mix with high percentage of recurring revenue » Lower credit and market risk
Slide 4: 1Q20 Financial Results
1Q20 Financial Results PROFITS RETURNS BALANCE SHEET › Net Income: $944 million › ROE: 10.1% › CET1: 11.3% › Diluted EPS: $1.05 › ROTCE: 20.4% (a) › Tier 1 Leverage: 6.0% › Returned $1.3 billion to shareholders › SLR: 5.6% › LCR: 115% P R E - TA X I N C O M E T O TA L R E V E N U E ($ millions) ($ m
Slide 5: 1Q20 Financial Highlights
1Q20 Financial Highlights ($ millions, except per share data) 1Q20 4Q19 1Q19 TO TAL R E V E N U E $4,108 (14)% 5% Fee revenue 3,323 (16) 10 Net interest revenue 814 - (3) Provision for credit losses 169 N/M N/M Noninterest expense 2,712 (9) - Income before income taxes 1,227 (33) 3 Net income applic
Slide 6: Capital and Liquidity
Capital and Liquidity 1Q20 4Q19 1Q19 Consolidated regulatory capital ratios: (a) Common Equity Tier 1 (“CET1”) ratio 11.3% 11.5% 11.1% Tier 1 capital ratio 13.5 13.7 13.2 Total capital ratio 14.3 14.4 14.0 Tier 1 leverage ratio 6.0 6.6 6.8 Supplementary leverage ratio (“SLR”) 5.6 6.1 6.3 Average liq
Slide 7: Net Interest Revenue
Net Interest Revenue DRIVERS OF SEQUENTIAL NIR CHANGE ($ millions) › Higher deposit balances due to ongoing deposit initiatives and surge in March 815 814 › Increased investment securities and loans › Lower yields on asset portfolios were partially offset by lower deposit rates › Wider spreads betwe
Slide 8: Deposit Balances
Deposit Balances ($ billions) AV E R A G E 1 Q 2 0 AV E R A G E DEPOSITS DEPOSITS BY MONTH +20% +31% +11% 258 308 232 › March balances increased significantly 214 235 230 › Majority of client deposit balances linked to 198 182 Investment Services businesses 160 0.99% › Deposit pricing adjusted for r
Slide 9: Credit Risk Profile
Credit Risk Profile ($ billions) AV E R A G E I N T E R E S T - (a) (a) LOANS SECURITIES EARNING ASSETS +15% +9% Corporates, CLOs, ABS, Munis, CP 324 Overdrafts Non-agency and CDs 298 56 and other RMBS & CMBS 282 Wealth 4% 53 14% management 7% 51 26% Commercial 6% U.S. U.S. Agency, 136 18% 129 Treas
Slide 10: Noninterest Expense
Noninterest Expense ($ millions) 1Q20 4Q19 1Q19 › Noninterest expense increased slightly year-over-year Staff $1,482 (10)% (3)% › Increase primarily reflects continued investments in Professional, legal and other purchased services 330 (10) 2 technology and higher pension expense, partially Software
Slide 11: Investment Services
Investment Services FINANCIAL HIGHLIGHTS ($ millions unless otherwise noted) 1Q20 4Q19 1Q19 › Asset Servicing up year-over-year on higher foreign Total revenue by line of business: exchange and other trading revenue and volumes from Asset Servicing $1,531 9% 8% existing clients, partially offset by
Slide 12: Investment Services - Revenue Drivers
Investment Services - Revenue Drivers ($ millions) +8% +16% +6% +7% +9% 1,531 653 419 339 300 1,415 396 317 276 561 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 1Q19 1Q20 ASSET ISSUER TREASURY CLEARANCE AND SERVICING PERSHING SERVICES SERVICES C O L L AT E R A L + FX and other trading + Clearing volumes
Slide 13: Investment Management
Investment Management FINANCIAL HIGHLIGHTS ($ millions unless otherwise noted) 1Q20 4Q19 1Q19 › Asset Management down year-over-year on equity Total revenue by line of business: investment losses, including seed capital, and an Asset Management $620 (10)% (3)% unfavorable change in the mix of AUM si
Slide 14: Other Segment
Other Segment FINANCIAL HIGHLIGHTS ($ millions unless otherwise noted) 1Q20 4Q19 1Q19 › Total revenue decreased sequentially primarily reflecting $21 $817 $17 the gain on sale of an equity investment recorded in Fee revenue Net securities gains (losses) 9 (23) 1 4Q19 Total fee and other revenue 30 7
Slide 15: Appendix
Ye BNY MELLON Appendix
Slide 16: Footnotes
Footnotes 1Q20 Financial Highlights, Page 5 (a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. (b) See page 18 for corresponding reconciliation of this non-GAAP measure. (c) Represents a non-GAAP measure. See
Slide 17: First Quarter Results – Impact of Sequential Notable Items
First Quarter Results – Impact of Sequential Notable Items ($ in millions, except per share data unless otherwise noted) 1Q20 4Q19 1Q20 vs 4Q19 Results – Notable Results – Results – Notable Results – GAAP non- GAAP items non-GAAP GAAP items(a) non-GAAP GAAP Fee revenue $3,323 $— $3,323 $3,971 $815 $
Slide 18: Return on Common Equity and Tangible Common Equity Reconciliation
Return on Common Equity and Tangible Common Equity Reconciliation ($ millions) 1Q20 4Q19 1Q19 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $944 $1,391 $910 Add: Amortization of intangible assets 26 28 29 Less: Tax impact of amortization of intangible
Slide 19: Pre-tax Operating Margin Reconciliation – Investment Management Business
Pre-tax Operating Margin Reconciliation – Investment Management Business ($ millions) 1Q20 4Q19 1Q19 Income before income taxes – GAAP $194 $240 $266 Total revenue – GAAP $898 $971 $936 Less: Distribution and servicing expense 91 93 91 Adjusted total revenue, net of distribution and servicing expens
Slide 20: 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 21: BNY Mellon
Ye BNY MELLON
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