The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q2 2023 Earnings Presentation
16 slides from The Bank Of New York Mellon's earnings presentation, Jul 18, 2023
Slide 1: 2Q23 Financial Highlights
2Q23 Financial Highlights J U L Y 1 8 , 2 0 2 3
Slide 2: 2Q23 Financial Highlights
2 ROE: 11.6% ROTCE: 22.6% 2Q23 Financial Highlights Revenue Pre-tax income Pre-tax margin Returns Capital ratios T1L: 5.7% CET1: 11.1% • Revenue up 5% YoY – Fee revenue down 2% YoY – Net interest revenue up 33% YoY • Expense flat YoY • Provision for credit losses was $5mm • Average loans flat QoQ •
Slide 3: 2Q23 Financial Results
3 2Q23 vs. $mm, except per share data or unless otherwise noted 2Q23 1Q23 2Q22 1Q23 2Q22 Fee revenue $3,257 $3,156 $3,339 3% (2)% Investment and other revenue 97 79 91 N/M N/M Net interest revenue 1,100 1,128 824 (2)% 33% Total revenue $4,454 $4,363 $4,254 2% 5% Provision for credit losses 5 27 47 N
Slide 4: Capital and Liquidity
4 2Q23 1Q23 2Q22 Consolidated regulatory capital ratios:(a) Tier 1 leverage ratio 5.7% 5.8% 5.2% Supplementary leverage ratio ("SLR") 7.0 6.9 6.2 Common Equity Tier 1 ratio – Advanced Approaches 11.1 11.0 10.0 Common Equity Tier 1 ratio – Standardized Approach 11.7 11.4 10.1 Consolidated regulatory
Slide 5: Net Interest Revenue and Balance Sheet Trends
5 2Q23 vs. $bn, avg. 2Q23 1Q23 2Q22 Deposits: Noninterest-bearing $62 (11)% (32)% Interest-bearing 215 5% (2)% Total deposits $277 1% (11)% Interest-earning assets: Cash and reverse repo 155 15% 7% Loans 63 —% (8)% Investment securities: HQLA 112 (6) % (9) % Non-HQLA 24 — % (13) % Total investment s
Slide 6: Noninterest Expense
6 2Q23 vs. $mm, unless otherwise noted 2Q23 1Q23 2Q22 Staff $1,718 (4)% 6% Software and equipment 450 5% 11% Professional, legal and other purchased services 378 1% —% Net occupancy 121 2% (3)% Sub-custodian and clearing 119 1% (9)% Distribution and servicing 93 9% 3% Business development 47 21% 9%
Slide 7: Securities Services
7 2Q23 vs. $mm, unless otherwise noted 2Q23 1Q23 2Q22 Total revenue by line of business: Asset Servicing $1,706 3% 11% Issuer Services 534 18% 13% Total revenue $2,240 6% 12% Provision for credit losses 16 N/M N/M Noninterest expense 1,582 2% (4)% Income before income taxes $642 15% 91% Fee revenue
Slide 8: Market and Wealth Services
8 2Q23 vs. $mm, unless otherwise noted 2Q23 1Q23 2Q22 Total revenue by line of business: Pershing $686 (1)% 8% Treasury Services 402 (2)% 8% Clearance and Collateral Management 357 (1)% 17% Total revenue $1,445 (1)% 10% Provision for credit losses 7 N/M N/M Noninterest expense 781 2% 11% Income befo
Slide 9: Investment and Wealth Management
9 2Q23 vs. $mm, unless otherwise noted 2Q23 1Q23 2Q22 Total revenue by line of business: Investment Management $546 (2)% (9)% Wealth Management 267 (1)% (10)% Total revenue $813 (2)% (10)% Provision for credit losses 7 N/M N/M Noninterest expense 677 (8)% (2)% Income before income taxes $129 39% (38
Slide 10: Other Segment
10 • Total revenue includes corporate treasury and other investment activity, including hedging activity which has an offsetting impact between fee and other revenue and net interest expense – YoY decrease in total revenue primarily reflects a strategic equity investment gain recorded in 2Q22 • Prov
Slide 11: Appendix
Appendix Sm BNY MELLON Consider Everything
Slide 12: Footnotes
12 Page 3 – 2Q23 Financial Results (a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. Page 4 – Capital and Liquidity (a) Regulatory capital and liquidity ratios for June 30, 2023 are preliminary. For our CET1
Slide 13: Non-GAAP Reconciliations
13 2023 2022 $mm, expect common shares and unless otherwise noted June 30 March 31 June 30 BNY Mellon shareholders’ equity at period end — GAAP $ 40,933 $ 40,634 $ 40,984 Less: Preferred stock 4,838 4,838 4,838 BNY Mellon common shareholders’ equity at period end — GAAP 36,095 35,796 36,146 Less: Go
Slide 14: Pre-tax Operating Margin Reconciliation – Investment and Wealth Management
14 (a) Income before income taxes divided by total revenue. (b) Notable items in 2Q23 reflect litigation reserves and severance. Notable items in 2Q22 reflect litigation reserves. (c) Notable items in 2Q23 reflect litigation reserves, severance and a disposal loss (reflected in investment and other
Slide 15: Noninterest Expense Reconciliation – Impact of Notable Items
15 (a) Noninterest expense in 2022 increased by 13% year-over-year and by 8% excluding the impact of notable items and currency translation. (b) Notable items in 2022 include the 3Q22 goodwill impairment, the 4Q22 net loss from repositioning the securities portfolio, severance expense, litigation re
Slide 16: Forward-looking statements
16 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 may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Refo
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