The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q2 2019 Earnings Presentation
17 slides from The Bank Of New York Mellon's earnings presentation, Jul 17, 2019
Slide 1: Second Quarter 2019 Financial Highlights
Second Quarter 2019 Financial Highlights July 17, 2019
Slide 2: 2Q19 Financial Results
Profits • Net Income $969 million, (8)% y/y • Diluted EPS $1.01, (2)% y/y Returns • ROE: X.X% 2Q19 Financial Results • ROTCE: XX.X% • Returns XYZ to shareholders Profits Returns Balance Sheet (a) • ROE: 10.4% • Net income: $969 million (b) • CET1: 11.2% Balance Sheet • ROTCE: 21.2% • Diluted EPS: $1
Slide 3: Differentiation, scale and investment for future success
Differentiation, scale and investment for future success Strong position with market headwinds • Drive improved organizational quality and + Unique global franchise and business model efficiency World’s largest asset servicer and + custodian • Investing in technology and product Stable pretax margin
Slide 4: 2Q19 Financial Highlights
2Q19 Financial Highlights Growth vs. ($ millions) 2Q19 1Q19 2Q18 Total revenue $3,924 1% (5)% Fee revenue 3,105 2 (3) Net interest revenue 802 (5) (12) Provision for credit losses (8) N/M N/M Noninterest expense 2,647 (2) (4) Income before income taxes $1,285 8% (8)% Net income applicable to common
Slide 5: Capital and Liquidity
Capital and Liquidity 2Q19 1Q19 2Q18 Consolidated regulatory capital ratios: (a) Common Equity Tier 1 (“CET1”) ratio 11.2% 11.1% 11.0% Tier 1 capital ratio 13.3 13.2 13.1 Total capital ratio 14.0 14.0 13.8 Tier 1 leverage ratio 6.8 6.8 6.7 Supplementary leverage ratio (“SLR”) 6.3 6.3 6.1 Average liq
Slide 6: Net Interest Revenue
Net Interest Revenue Net Interest Revenue and Net Interest Margin Performance Commentary ($ millions) quarter-over-quarter (12)% (5)% • Higher deposit balances 916 ◦ Interest-bearing inflows partially offset by noninterest- 841 802 bearing outflows 1.26% 1.20% • High quality and liquid securities po
Slide 7: Net Interest Revenue (continued)
Net Interest Revenue (continued) ($ millions) Yield Curve 4/17/19 7/12/19 3.0% Performance Commentary 2.5% quarter-over-quarter Drivers of Sequential NIR Change 2.0% • Net interest revenue down primarily on lower securities 1.5% 1M 3M 12M 2Y 5Y 10Y yields, higher deposit and funding costs, lower loa
Slide 8: Noninterest Expense
Noninterest Expense Growth vs. Performance Commentary ($ millions) 2Q19 1Q19 2Q18 year-over-year Staff $1,421 (7)% (5)% • Noninterest expense, down 4% with over 1% of the Professional, legal and other purchased decrease driven by the favorable impact of a stronger U.S. 337 4 3 services dollar; remai
Slide 9: Investment Services
Investment Services Growth vs. Performance Commentary Financial Highlights ($ millions) 2Q19 1Q19 2Q18 year-over-year Total revenue by line of business: Asset Servicing $1,391 (1)% (8)% • Asset Servicing, down 8% on lower net interest revenue, Pershing 564 2 1 lower foreign exchange and securities l
Slide 10: Investment Services - Revenue Drivers
Investment Services - Revenue Drivers ($ millions) (8)% 1% 3% 1,520 1,391 558 564 431 446 (4)% 6% 329 317 269 284 2Q18 2Q19 2Q18 2Q19 2Q18 2Q19 2Q18 2Q19 2Q18 2Q19 Asset Servicing Pershing Issuer Services Treasury Services Clearance and Collateral + AUC/A + Transaction + Depositary receipts + Intere
Slide 11: Investment Management
Investment Management Growth vs. Performance Commentary Financial Highlights ($ millions) 2Q19 1Q19 2Q18 year-over-year Total revenue by line of business: Asset Management $618 (3)% (12)% • Asset Management, down 12% primarily reflecting the Wealth Management 299 (1) (5) change in AUM which was impa
Slide 12: Other Segment
Other Segment Performance Commentary ($ millions) 2Q19 1Q19 2Q18 year-over-year Fee revenue $34 $29 $40 • Fee revenue, net securities gains and net interest Net securities gains 7 1 1 expense are primarily related to corporate treasury and Total fee and other revenue 41 30 41 other investment activi
Slide 13: Appendix
yy Se BNY MELLON Appendix
Slide 14: Footnotes
Footnotes 2Q19 Financial Results - Page 2 (a) Reflects net income applicable to common shareholders. (b) Quarterly returns are annualized. See the Appendix for reconciliation of this non-GAAP measure. Financial Highlights - Page 4 (a) Operating leverage is the rate of increase (decrease) in total re
Slide 15: Return on Common Equity and Tangible Common Equity Reconciliation
Return on Common Equity and Tangible Common Equity Reconciliation ($ millions) 2Q19 1Q19 2Q18 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $969 $910 $1,055 Add: Amortization of intangible assets 30 29 48 Less: Tax impact of amortization of intangible
Slide 16: Pre-tax Operating Margin Reconciliation - Investment Management Business
Pre-tax Operating Margin Reconciliation - Investment Management Business 2Q19 1Q19 2Q18 ($ millions) Income before income taxes – GAAP $265 $269 $319 Total revenue – GAAP $917 $939 $1,018 Less: Distribution and servicing expense 94 91 103 Adjusted total revenue, net of distribution and servicing exp
Slide 17: 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,
Bank of New York Mellon — Q2 2019 Earnings Presentation on 6ix