The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q3 2017 Earnings Presentation
22 slides from The Bank Of New York Mellon's earnings presentation, Oct 19, 2017
Slide 1: BNY Mellon Third Quarter 2017 Financial Highlights
BNY Mellon Third Quarter 2017 Financial Highlights October 19, 2017
Slide 2: Cautionary Statement
2 Third 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”, “target”, “expect”, “intend”, “continue”, “seek”, “b
Slide 3: Summary Financial Results for Third Quarter 2017 - GAAP
3 Third Quarter 2017 – Financial Highlights Summary Financial Results for Third Quarter 2017 - GAAP Growth vs. $ in millions, except per share data 3Q17 2Q17 3Q16 2Q17 3Q16 Revenue $ 4,016 $ 3,956 $ 3,941 2 % 2% Expenses $ 2,654 $ 2,655 $ 2,643 — % —% Operating leverage1 +156 bps +148 bps Income bef
Slide 4: Summary Financial Results for Third Quarter 2017 (Non-GAAP)
4 Third Quarter 2017 – Financial Highlights Summary Financial Results for Third Quarter 2017 (Non-GAAP)1 Growth vs. $ in millions, except per share data 3Q17 2Q17 3Q16 2Q17 3Q16 Revenue $ 4,013 $ 3,953 $ 3,932 2% 2% Expenses $ 2,596 $ 2,590 $ 2,564 —% 1% Adjusted operating leverage2 +129 bps +81 bps
Slide 5: Key Messages
5 Third Quarter 2017 – Financial Highlights Key Messages • Client focus is at the core of our culture • Third quarter performance was consistent with our expectation • Reasonable growth in asset servicing, clearing and investment management offset by lower depositary receipts revenue • Opportunities
Slide 6: Third Quarter Financial Highlights
6 Third Quarter 2017 – Financial Highlights Third Quarter Financial Highlights (comparisons are 3Q17 versus 3Q16) Fee Revenue • Investment services fees increased +1%; asset servicing fees increased +4% • Investment management and performance fees increased +5% Net Interest Revenue (“NIR”) • Driven
Slide 7: Third Quarter 2017 Key Performance Drivers
7 Third Quarter 2017 – Financial Highlights Third Quarter 2017 Key Performance Drivers (comparisons are 3Q17 versus 3Q16) • Earnings per common share of $0.94, +4%, driven by strength in net interest revenue, investment management and performance fees, and investment services fees, partially offset
Slide 8: Fee and Other Revenue (Consolidated)
8 Third Quarter 2017 – Financial Highlights Fee and Other Revenue (Consolidated) Growth vs. ($ in millions) 3Q17 2Q17 3Q16 Investment services fees: Asset servicing1 $ 1,105 2% 4% Clearing services 383 (3) 10 Issuer services 288 20 (15) Treasury services 141 1 3 Total investment services fees 1,917
Slide 9: Investment Management Metrics
9 Third Quarter 2017 – Financial Highlights Investment Management Metrics Change in Assets Under Management (AUM)1,2 Growth vs. ($ in billions) 3Q17 LTM 3Q17 2Q17 3Q16 Beginning balance of AUM $1,771 $1,715 Net inflows (outflows): Long-term strategies: Equity (2) (13) Fixed income 4 7 Liability-driv
Slide 10: Investment Services Metrics
10 Third Quarter 2017 – Financial Highlights Investment Services Metrics Growth vs. 3Q17 2Q17 3Q16 Assets under custody and/or administration at period end (trillions)1,2 $ 32.2 4 % 6 % Estimated new business wins (AUC/A) (billions)1 $ 166 Market value of securities on loan at period end (billions)3
Slide 11: Net Interest Revenue
11 Third Quarter 2017 – Financial Highlights Net Interest Revenue Growth vs. ($ in millions) 3Q17 2Q17 3Q16 Net interest revenue – GAAP $ 839 2% 8 % Tax equivalent adjustment 12 N/M N/M Net interest revenue (FTE) – Non-GAAP1 $ 851 2% 8 % Net interest margin - GAAP 1.15% 1 bps 10 bps Net interest mar
Slide 12: Noninterest Expense
12 Third Quarter 2017 – Financial Highlights Noninterest Expense Growth vs. ($ in millions) 3Q17 2Q17 3Q16 Staff $ 1,469 4 % —% Professional, legal and other purchased services 305 (4) 4 Software and equipment 233 — 8 Net occupancy 141 1 (1) Distribution and servicing 109 5 4 Sub-custodian 62 (5) 5
Slide 13: Capital Ratios
13 Third Quarter 2017 – Financial Highlights Capital Ratios 09/30/17 06/30/17 12/31/16 Consolidated regulatory capital ratios:1 Standardized Approach CET1 ratio 12.3% 12.0% 12.3% Tier 1 capital ratio 14.6 14.3 14.5 Total (Tier 1 plus Tier 2) capital ratio 15.6 14.8 15.2 Advanced Approach CET1 ratio
Slide 14: Capital Ratio Footnotes
14 Third Quarter 2017 – Financial Highlights Capital Ratio Footnotes 1 Sept. 30, 2017 regulatory capital ratios are preliminary. See the “Capital Ratios” section in the earnings release for additional detail. For our CET1, Tier 1 capital and Total capital ratios, our effective capital ratios under t
Slide 15: Appendix
Appendix
Slide 16: Investment Management
16 Third Quarter 2017 – Financial Highlights Investment Management . Growth vs. ($ in millions) 3Q17 2Q17 3Q16 Investment management and performance fees $ 886 3% 5% Distribution and servicing 51 (4) 4 Other1 (19) N/M N/M Net interest revenue 82 (6) — Total Revenue 1,000 1 4 Provision for credit los
Slide 17: Investment Services
17 Third Quarter 2017 – Financial Highlights Investment Services Growth vs. ($ in millions) 3Q17 2Q17 3Q16 Investment services fees: Asset servicing $ 1,081 2% 4% Clearing services 381 (3) 10 Issuer services 288 20 (14) Treasury services 141 1 4 Total investment services fees 1,891 3 2 Foreign excha
Slide 18: Expense, Pre-Tax Operating Margin & Operating Leverage - Non-GAAP Reconciliations
18 Third Quarter 2017 – Financial Highlights Expense, Pre-Tax Operating Margin & Operating Leverage - Non-GAAP Reconciliations 3Q17 2Q17 3Q16 Growth vs. ($ in millions) 2Q17 3Q16 Total revenue – GAAP $ 4,016 $ 3,956 $ 3,941 1.52 % 1.90% Less: Net income attributable to noncontrolling interests of co
Slide 19: Return on Common Equity and Tangible Common Equity Reconciliation
19 Third Quarter 2017 – Financial Highlights Return on Common Equity and Tangible Common Equity Reconciliation 3Q17 2Q17 3Q16 ($ in millions) Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $ 983 $ 926 $ 974 Add: Amortization of intangible assets 52 53
Slide 20: Basel III Capital Components & Ratios
20 Third 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) 09/30/171 06/30/17 12/31/16 Transitional basis2 Fully P
Slide 21: Supplementary Leverage Ratio
21 Third Quarter 2017 – Financial Highlights Supplementary Leverage Ratio ($ in millions) 09/30/17 1 06/30/17 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 $ 22,351 $
Slide 22: Investment Management Pre-Tax Operating Margin - Non-GAAP Reconciliation
22 Third Quarter 2017 – Financial Highlights Investment Management Pre-Tax Operating Margin - Non-GAAP Reconciliation 3Q17 2Q17 3Q16 ($ in millions) Income before income taxes – GAAP $ 300 $ 288 $ 256 Add: Amortization of intangible assets 15 15 22 Provision for credit losses (2) — — Adjusted income
Bank of New York Mellon — Q3 2017 Earnings Presentation on 6ix