The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q4 2017 Earnings Presentation
22 slides from The Bank Of New York Mellon's earnings presentation, Jan 18, 2018
Slide 1: BNY Mellon Fourth Quarter 2017 Financial Highlights
BNY Mellon Fourth Quarter 2017 Financial Highlights January 18, 2018
Slide 2: Cautionary Statement
2 Fourth Quarter 2017 – Financial Highlights Cautionary Statement A number of statements in 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”,
Slide 3: Summary Financial Results for 2017 - GAAP
3 Fourth Quarter 2017 – Financial Highlights Summary Financial Results for 2017 - GAAP • Fourth quarter earnings of $1.13 billion, or $1.08 per common share • Total revenue of $3.7 billion, down 2% ◦ Includes a $320 million negative impact related to the U.S. tax legislation and other charges1; whic
Slide 4: Financial Results for Fourth Quarter 2017 - GAAP
4 Fourth Quarter 2017 – Financial Highlights Financial Results for Fourth Quarter 2017 - GAAP Growth vs. ($ in millions, except per share data) 4Q17 3Q17 4Q16 3Q17 4Q16 Revenue $3,728 $4,016 $3,790 (7)% (2)% Expense $3,006 $2,654 $2,631 13% 14% Income before income taxes $ 728 $1,368 $1,152 (47)% (3
Slide 5: Estimated U.S. Tax Legislation Impact
5 Fourth Quarter 2017 – Financial Highlights Estimated U.S. Tax Legislation Impact1 1 Our estimate of the impact of U.S. tax legislation is based on certain assumptions and our current interpretation of the Tax Cuts and Jobs Act, and may change, possibly materially, as we refine our analysis and as
Slide 6: Financial Results for Full Year 2017 - GAAP
6 Fourth Quarter 2017 – Financial Highlights Financial Results for Full Year 2017 - GAAP Growth vs. ($ in millions, except per share data) FY17 FY16 FY16 Revenue $ 15,543 $ 15,237 2% Expense $ 10,957 $ 10,523 4% Operating leverage1 (211) bps Income before income taxes $ 4,610 $ 4,725 (2)% Pre-tax op
Slide 7: Fee and Other Revenue - GAAP (Consolidated)
7 Fourth Quarter 2017 – Financial Highlights Fee and Other Revenue - GAAP (Consolidated) Growth vs. ($ in millions) 4Q17 3Q17 4Q16 Investment services fees: Asset servicing1 $ 1,130 2% 6% Clearing services 400 4 13 Issuer services 197 (32) (7) Treasury services 137 (3) (2) Total investment services
Slide 8: Investment Management Metrics
8 Fourth Quarter 2017 – Financial Highlights Investment Management Metrics Change in Assets Under Management (AUM)1, 2 Growth vs. ($ in billions) 4Q17 LTM 4Q17 3Q17 4Q16 Beginning balance of AUM $ 1,824 $ 1,648 Net inflows (outflows): Long-term strategies: Equity (6) (14) Fixed income (2) 6 Liabilit
Slide 9: Investment Services Metrics
9 Fourth Quarter 2017 – Financial Highlights Investment Services Metrics Growth vs. 4Q17 3Q17 4Q16 Assets under custody and/or administration at period end (trillions)1, 2 $ 33.3 3% 11% Estimated new business wins (AUC/A) (billions)1 $ 575 Market value of securities on loan at period end (billions)3
Slide 10: Net Interest Revenue
10 Fourth Quarter 2017 – Financial Highlights Net Interest Revenue Growth vs. ($ in millions) 4Q17 3Q17 4Q16 Net interest revenue – GAAP $ 851 1% 2% Tax equivalent adjustment 11 N/M N/M Net interest revenue (FTE) – Non-GAAP1 $ 862 1% 2% Net interest margin - GAAP 1.14% (1) bps (2) bps Net interest m
Slide 11: Noninterest Expense
11 Fourth Quarter 2017 – Financial Highlights Noninterest Expense Growth vs. ($ in millions) 4Q17 3Q17 4Q16 Staff $ 1,614 10% 16% Professional, legal and other purchased services 338 11 4 Software and equipment 297 27 25 Net occupancy 153 9 — Distribution and servicing 106 (3) 8 Sub-custodian 59 (5)
Slide 12: Capital Ratios
12 Fourth Quarter 2017 – Financial Highlights Capital Ratios 12/31/17 09/30/17 12/31/16 Consolidated regulatory capital ratios:1 Standardized Approach: CET1 ratio 12.0% 12.3% 12.3% Tier 1 capital ratio 14.2 14.6 14.5 Total (Tier 1 plus Tier 2) capital ratio 15.1 15.6 15.2 Advanced Approach: CET1 rat
Slide 13: Capital Ratio Footnotes
13 Fourth Quarter 2017 – Financial Highlights Capital Ratio Footnotes 1 Dec. 31, 2017 regulatory capital ratios are preliminary. See the “Capital and Liquidity” section in the earnings release for additional detail. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios
Slide 14: Appendix
Appendix
Slide 15: Fourth Quarter Impact of Significant Items - Consolidated
15 Fourth Quarter 2017 – Financial Highlights Fourth Quarter Impact of Significant Items - Consolidated ($ in millions, except per share data) Results - GAAP U.S. tax legislation Other charges1 Fee and other revenue $ 2,860 $ (279) $ (37) Income from consolidated investment management funds 17 — — N
Slide 16: Fourth Quarter Impact of Significant Items - Business Segments
16 Fourth Quarter 2017 – Financial Highlights Fourth Quarter Impact of Significant Items - Business Segments 1 Other charges include severance, litigation, an asset impairment and investment securities losses related to the sale of certain securities. Business Segments U.S. tax legislation Other cha
Slide 17: Investment Management
17 Fourth Quarter 2017 – Financial Highlights Investment Management . Growth vs. ($ in millions) 4Q17 3Q17 4Q16 Investment management and performance fees1 $ 948 7% 14% Distribution and servicing 51 — 6 Other1 (25) N/M N/M Net interest revenue 74 (10) (8) Total revenue1 1,048 5 9 Provision for credi
Slide 18: Investment Services
18 Fourth Quarter 2017 – Financial Highlights Investment Services Growth vs. ($ in millions) 4Q17 3Q17 4Q16 Investment services fees: Asset servicing $ 1,106 2% 6% Clearing services 400 5 13 Issuer services 196 (32) (7) Treasury services 136 (4) (2) Total investment services fees 1,838 (3) 5 Foreign
Slide 19: Return on Common Equity and Tangible Common Equity Reconciliation
19 Fourth Quarter 2017 – Financial Highlights Return on Common Equity and Tangible Common Equity Reconciliation 4Q17 3Q17 4Q16 FY17 FY16($ in millions) Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $ 1,126 $ 983 $ 822 $ 3,915 $ 3,425 Add: Amortization
Slide 20: Basel III Capital Components & Ratios
20 Fourth Quarter 2017 – Financial Highlights Basel III Capital Components & Ratios 1 Preliminary. 2 Reflects transitional adjustments to CET1, Tier 1 capital and Tier 2 capital required under the U.S. capital rules. 3 Estimated. ($ in millions) 12/31/171 09/30/17 12/31/16 Transitional basis2 Fully
Slide 21: Supplementary Leverage Ratio
21 Fourth Quarter 2017 – Financial Highlights Supplementary Leverage Ratio ($ in millions) 12/30/17 1 09/30/17 12/31/16 Transitional basis Fully phased-in (Non-GAAP)2 Transitional basis Fully phased-in (Non-GAAP)2 Transitional basis Fully phased-in (Non-GAAP)2 Consolidated: Tier 1 capital $ 22,044 $
Slide 22: Investment Management Non-GAAP Reconciliation
22 Fourth Quarter 2017 – Financial Highlights Growth vs. ($ in millions) 4Q17 4Q16 4Q16 Investment management and performance fees - GAAP $ 962 $ 848 13% Impact of changes in foreign currency exchange rates — 21 Investment management and performance fees, as adjusted - Non-GAAP $ 962 $ 869 11% Inves
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