The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q3 2023 Earnings Presentation
17 slides from The Bank Of New York Mellon's earnings presentation, Oct 17, 2023
Slide 1: 3Q23 Financial Highlights
3Q23 Financial Highlights O C T O B E R 1 7 , 2 0 2 3
Slide 2: 3Q23 Financial Highlights
2 • Revenue up 2% YoY – Fee revenue flat YoY – Net interest revenue up 10% YoY • Expense down 16% YoY, up 3%(b) excluding notable items • Provision for credit losses was $3mm • Average loans up 1% QoQ • Average deposits down 5% QoQ • Returned $0.8bn to common shareholders, including $450mm of common
Slide 3: 3Q23 Financial Results
3 3Q23 vs. $mm, except per share data or unless otherwise noted 3Q23 2Q23 3Q22 2Q23 3Q22 Fee revenue $3,245 $3,257 $3,236 —% —% Investment and other revenue 113 97 117 N/M N/M Net interest revenue 1,016 1,100 926 (8) 10 Total revenue $4,374 $4,454 $4,279 (2)% 2% Provision for credit losses 3 5 (30)
Slide 4: Capital and Liquidity
4 3Q23 2Q23 3Q22 Consolidated regulatory capital ratios:(a) Tier 1 leverage ratio 6.1% 5.7% 5.4% Supplementary leverage ratio ("SLR") 7.2 7.0 6.3 Common Equity Tier 1 ratio – Advanced Approaches 11.4 11.1 10.1 Common Equity Tier 1 ratio – Standardized Approach 12.0 11.8 10.0 Consolidated regulatory
Slide 5: Net Interest Revenue and Balance Sheet Trends
5 3Q23 vs. $bn, avg. 3Q23 2Q23 3Q22 Deposits: Noninterest-bearing $52 (16)% (38)% Interest-bearing 210 (3) 3 Total deposits $262 (5)% (9)% Interest-earning assets: Cash and reverse repo 138 (11)% 5% Loans 64 1 (6) Investment securities: HQLA 107 (4)% (11)% Non-HQLA 24 (1) (11) Total investment secur
Slide 6: Noninterest Expense
6 3Q23 vs. $mm, unless otherwise noted 3Q23 2Q23 3Q22 Staff $1,755 2% 5% Software and equipment 452 — 7 Professional, legal and other purchased services 368 (3) 1 Net occupancy 140 16 13 Sub-custodian and clearing 121 2 (2) Distribution and servicing 87 (6) (1) Bank assessment charges 37 (10) 6 Busi
Slide 7: Securities Services
7 3Q23 vs. $mm, unless otherwise noted 3Q23 2Q23 3Q22 Total revenue by line of business: Asset Servicing $1,593 (7)% —% Issuer Services 496 (7) 4 Total revenue $2,089 (7)% 1% Provision for credit losses 19 N/M N/M Noninterest expense 1,585 — 2 Income before income taxes $485 (24)% (7)% Fee revenue 1
Slide 8: Market and Wealth Services
8 3Q23 vs. $mm, unless otherwise noted 3Q23 2Q23 3Q22 Total revenue by line of business: Pershing $699 2% 6% Treasury Services 389 (3) — Clearance and Collateral Management 357 — 12 Total revenue $1,445 —% 6% Provision for credit losses 6 N/M N/M Noninterest expense 808 3 10 Income before income tax
Slide 9: Investment and Wealth Management
9 3Q23 vs. $mm, unless otherwise noted 3Q23 2Q23 3Q22 Total revenue by line of business: Investment Management $557 2% (4)% Wealth Management 270 1 (5) Total revenue $827 2% (4)% Provision for credit losses (9) N/M N/M Noninterest expense 672 (1) (50) Income before income taxes $164 27% N/M Fee reve
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 increase in total revenue primarily reflects debt extinguishment gains, partially offset by net securit
Slide 11: Appendix
Appendix Sm BNY MELLON Consider Everything
Slide 12: Footnotes
12 Page 3 – 3Q23 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 September 30, 2023 are preliminary. For our
Slide 13: Return on Common Equity and Tangible Common Equity Reconciliation
13 $mm 3Q23 2Q23 3Q22 Net income applicable to common shareholders of The Bank of New York Mellon Corporation — GAAP $ 956 $ 1,031 $ 319 Add: Amortization of intangible assets 15 14 17 Less: Tax impact of amortization of intangible assets 3 4 4 Adjusted net income applicable to common shareholders o
Slide 14: Diluted EPS and Operating Leverage Reconciliation
14 3Q23 vs. 3Q23 3Q22 3Q22 Diluted earnings per common share — GAAP $ 1.22 $ 0.39 213% Less: Disposal gain (loss) (reflected in investment and other revenue) — 0.03 Less: Severance (0.04) (0.03) Litigation reserves (0.01) — Goodwill impairment — (0.82) Diluted earnings per common share, ex-notables
Slide 15: Book Value and Tangible Book Value Per Share Reconciliation
15 2023 2022 $mm, expect common shares and unless otherwise noted Sept. 30 June 30 Sept. 30 BNY Mellon shareholders’ equity at period end — GAAP $ 40,966 $ 40,933 $ 39,737 Less: Preferred stock 4,838 4,838 4,838 BNY Mellon common shareholders’ equity at period end — GAAP 36,128 36,095 34,899 Less: G
Slide 16: Noninterest Expense Reconciliation
16 (a) Noninterest expense in 2022 increased by 13% year-over-year and by 8% excluding the impact of notable items and currency translation. 2022 vs. $mm 2022 2021 2021 Noninterest expense — GAAP $ 13,010 $ 11,514 13% Less: Severance 216 31 Litigation reserves 134 98 Goodwill impairment 680 — Less:
Slide 17: Forward-Looking Statements
17 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 Private Securities Litigation Reform Act of 1995. Words such as
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