The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q2 2018 Earnings Presentation
15 slides from The Bank Of New York Mellon's earnings presentation, Jul 19, 2018
Slide 1: BNY Mellon Second Quarter 2018 Financial Highlights
BNY Mellon Second Quarter 2018 Financial Highlights July 19, 2018
Slide 2: 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”, “target”, “expect”, “intend”, “continue”, “seek”, “believe”, “plan”, “goal”,
Slide 3: Second Quarter 2018 - Financial Highlights
Second Quarter 2018 - Financial Highlights Growth vs. ($ in millions, except per share data) 2Q18 1Q18 2Q17 Financial Performance Fee revenue $ 3,209 (3)% 3% • Earnings of $1.06 billion or $1.03 earnings per Net securities gains (losses) 1 N/M N/M common share ◦ Positive operating leverage of 113 bp
Slide 4: Second Quarter 2018 - Financial Highlights
Second Quarter 2018 - Financial Highlights Total Revenue ($mm) Total Noninterest Expense ($mm) Income Before Income Taxes ($mm) 5% 3% 7% $4,178 $4,138 2,739 2,747 1,444 1,394 1,308 $3,956 2,655 2Q17 1Q18 2Q18 2Q17 1Q18 2Q18 2Q17 1Q18 2Q18 Earnings Per Share Pre-tax Operating Margin ROTCE (a) $ 1.10
Slide 5: Investment Services Business Highlights
Investment Services Business Highlights Growth vs. Business Performance Drivers Financial Highlights ($ millions) 2Q18 1Q18 2Q17 year-over-year Total revenue by line of business: • Asset Servicing, up 10% Asset Servicing $ 1,520 — % 10% ◦ Higher net interest revenue, foreign exchange and securities
Slide 6: Investment Management Business Highlights
Investment Management Business Highlights Growth vs. Business Performance Drivers Financial Highlights ($ millions) 2Q18 1Q18 2Q17 year-over-year Total revenue by line of business: • Asset Management, up 3% Asset Management $ 702 (9)% 3% ◦ Higher equity market values Wealth Management 316 (1) 4 ◦ Fa
Slide 7: Other Segment
Other Segment 2Q18 1Q18 2Q17 Business Performance Drivers Financial Highlights ($ millions) year-over-year Fee revenue $ 40 $ 57 $ 113 • Fee revenue decreased primarily reflecting the lease- Net securities gains (losses) 1 (49) — related gains recorded in 2Q17 and lower income from Total fee and oth
Slide 8: Capital and Liquidity
Capital and Liquidity June 30, 2018 March 31, 2018 Dec. 31, 2017 Consolidated regulatory capital ratios: (a) fully phased-in (b) Advanced Approach: CET1 ratio 11.0% 10.7% 10.3% Tier 1 capital ratio 13.1 12.7 12.3 Total capital ratio 13.9 13.4 13.0 Tier 1 leverage ratio 6.7 6.5 6.4 Supplementary leve
Slide 9: Net Interest Revenue
Net Interest Revenue Growth vs. 2Q18 1Q18 2Q17 Financial Performance Drivers ($ in millions) year-over-year Net interest revenue $ 916 —% 11% • Net interest revenue up 11% Add: Tax equivalent adjustment 5 N/M N/M ◦ Higher interest rates Net interest revenue (FTE) – Non-GAAP (a) $ 921 —% 10% Net inte
Slide 10: Noninterest Expense
Noninterest Expense Growth vs. Financial Performance Drivers ($ in millions) 2Q18 1Q18 2Q17 year-over-year Staff $ 1,489 (6)% 4% • Noninterest expense up 3% Professional, legal and other purchased services 328 13 3 ◦ Investments in technology, which impacted staff, professional, legal and Software a
Slide 11: Fee and Other Revenue
Fee and Other Revenue Growth vs. ($ in millions) 2Q18 1Q18 2Q17 Investment services fees: Asset servicing $ 1,097 (1)% 6% Securities lending 60 9 25 Clearing services 392 (5) (1) Issuer services 266 2 10 Treasury services 140 1 — Total investment services fees 1,955 (1) 5 Investment management and p
Slide 12: Appendix
Appendix
Slide 13: Footnotes
Footnotes Second Quarter 2018 - Financial Highlights, Page 3 (a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. (b) Regulatory capital ratios for June 30, 2018 are preliminary. For our CET1, Tier 1 capital and
Slide 14: Return on Common Equity and Tangible Common Equity Reconciliation
Return on Common Equity and Tangible Common Equity Reconciliation ($ in millions) 2Q18 1Q18 2Q17 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $ 1,055 $ 1,135 $ 926 Add: Amortization of intangible assets 48 49 53 Less: Tax impact of amortization of in
Slide 15: Pre-tax Operating Margin Reconciliation - Investment Management Business
Pre-tax Operating Margin Reconciliation - Investment Management Business 2Q18 1Q18 2Q17 ($ in millions) Income before income taxes – GAAP $ 319 $ 381 $ 288 Total revenue – GAAP $ 1,018 $ 1,088 $ 986 Less: Distribution and servicing expense 103 110 104 Adjusted total revenue, net of distribution and
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