The Bank Of New York Mellon Corporation · NYSE:BNY

The Bank Of New York Mellon — Bank of New York Mellon — Q3 2018 Earnings Presentation

16 slides from The Bank Of New York Mellon's earnings presentation, Oct 18, 2018

  1. Slide 1: BNY Mellon Third Quarter 2018 Financial Highlights

    BNY Mellon Third Quarter 2018 Financial Highlights October 18, 2018

  2. 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”, “likely”, “target”, “expect”, “intend”, “continue”, “seek”, “believe”, “plan”

  3. Slide 3: Financial Highlights

    Financial Highlights • Third quarter earnings of $1.1 billion, or $1.06 per common share, up 13% ◦ Significant items in the third quarter – Litigation increased expenses 2%; $(0.05) per common share – Positive impact of tax adjustment related to U.S. tax legislation and other changes; $0.05 per comm

  4. Slide 4: Third Quarter 2018 - Financial Highlights

    Third Quarter 2018 - Financial Highlights Growth vs. Financial Performance Drivers ($ in millions, except per share data) 3Q18 2Q18 3Q17 year-over-year Total revenue $ 4,069 (2)% 1% • Fee revenue, up 1% Fee revenue 3,168 (1) 1 ◦ Reflects higher equity market values, growth Net interest revenue 891 (

  5. Slide 5: Third Quarter 2018 - Financial Highlights (charts)

    Third Quarter 2018 - Financial Highlights Total Revenue ($m) Noninterest Expense ($m) Income Before Income Taxes ($m) 1% 3% (2)% $4,138 $2,747 $2,738 $1,394 $4,016 $4,069 $1,368 1,334 $2,654 3Q17 2Q18 3Q18 3Q17 2Q18 3Q18 3Q17 2Q18 3Q18 Earnings Per Share Pre-tax Operating Margin ROTCE (a) 13% 34% 34

  6. Slide 6: Year-to-date - Financial Highlights

    Year-to-date - Financial Highlights Growth vs. YTD 3Q18 YTD 3Q17 YTD 3Q17 ($ in millions, except per share data) Total revenue $ 12,385 $ 11,815 5% Fee revenue 9,696 9,276 5 Net interest revenue 2,726 2,457 11 Provision for credit losses (11) (18) N/M Noninterest expense 8,224 7,951 3 Income before

  7. Slide 7: Year-to-date - Financial Highlights (charts)

    Year-to-date - Financial Highlights Total Revenue ($m) Noninterest Expense ($m) Income Before Income Taxes ($m) 5% 3% 7% $12,385 $8,224 $4,172 $7,951 $3,882 $11,815 YTD 3Q17 YTD 3Q18 YTD 3Q17 YTD 3Q18 YTD 3Q17 YTD 3Q18 Earnings Per Share Pre-tax Operating Margin ROTCE (a) 21% 34% 24.1% $ 3.20 33% 22

  8. Slide 8: Investment Services Business Highlights

    Investment Services Business Highlights Growth vs. Business Performance Drivers Financial Highlights ($ millions) 3Q18 2Q18 3Q17 year-over-year Total revenue by line of business: • Asset Servicing, up 3% Asset Servicing $ 1,458 (4)% 3 % ◦ Higher equity market values, securities lending volumes, net

  9. Slide 9: Investment Management Business Highlights

    Investment Management Business Highlights Growth vs. Business Performance Drivers Financial Highlights ($ millions) 3Q18 2Q18 3Q17 year-over-year Total revenue by line of business: • Asset Management, up 2% Asset Management $ 704 — % 2% ◦ Higher equity market values and performance fees Wealth Manag

  10. Slide 10: Other Segment

    Other Segment 3Q18 2Q18 3Q17 Business Performance Drivers Financial Highlights ($ millions) year-over-year Fee revenue $ 7 $ 40 $ 50 • Fee revenue decreased Net securities gains — 1 19 ◦ Investments in renewable energy, including the Total fee and other revenue 7 41 69 impact of adjusting the provis

  11. Slide 11: Capital and Liquidity

    Capital and Liquidity Sept. 30, 2018 June 30, 2018 Dec. 31, 2017 Consolidated regulatory capital ratios: (a) fully phased-in (b) CET1 ratio 11.2% 11.0% 10.3% Tier 1 capital ratio 13.4 13.1 12.3 Total capital ratio 14.1 13.8 13.0 Tier 1 leverage ratio 7.0 6.7 6.4 Supplementary leverage ratio ("SLR")

  12. Slide 12: Noninterest Expense

    Noninterest Expense Growth vs. Financial Performance Drivers ($ in millions) 3Q18 2Q18 3Q17 year-over-year Staff $ 1,478 (1)% —% • Noninterest expense up 3% Professional, legal and other purchased services 332 1 9 ◦ Investments in technology and higher litigation expense, partially offset by Softwar

  13. Slide 13: Appendix

    Appendix

  14. Slide 14: Footnotes

    Footnotes Third Quarter 2018 - Financial Highlights, Page 4 (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 Sept. 30, 2018 are preliminary. For our CET1, Tier 1 capital and

  15. Slide 15: Return on Common Equity and Tangible Common Equity Reconciliation

    TO BE UPDATED Return on Common Equity and Tangible Common Equity Reconciliation 3Q18 2Q18 3Q17 YTD YTD ($ in millions) 3Q18 3Q17 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – GAAP $ 1,075 $ 1,055 $ 983 $ 3,265 $ 2,789 Add: Amortization of intangible assets

  16. Slide 16: Pre-tax Operating Margin Reconciliation - Investment Management Business

    Pre-tax Operating Margin Reconciliation - Investment Management Business 3Q18 2Q18 3Q17 ($ in millions) Income before income taxes – GAAP $ 316 $ 319 $ 300 Total revenue – GAAP $ 1,015 $ 1,018 $ 1,000 Less: Distribution and servicing expense 99 103 110 Adjusted total revenue, net of distribution and

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