The Bank Of New York Mellon Corporation · NYSE:BNY
The Bank Of New York Mellon — Bank of New York Mellon — Q4 2019 Earnings Presentation
20 slides from The Bank Of New York Mellon's earnings presentation, Jan 16, 2020
Slide 1: Fourth Quarter 2019 Financial Highlights
Fourth Quarter 2019 Financial Highlights January 16, 2020
Slide 2: 4Q19 Financial Results
4Q19 Financial Results Profits Returns Balance Sheet › Net Income: $1,391 million › ROE: 14.6% › CET1: 11.5% (a) › Includes $460 million of notable items › ROTCE: 29.3% › SLR: 6.1% › Diluted EPS: $1.52 › Returned $1.3 billion to shareholders › Includes $0.50 of notable items Pre-tax Income Total Rev
Slide 3: 2019 Financial Highlights – non-GAAP
2019 Financial Highlights – non-GAAP (a) Adjusted revenue of $15.7bn despite interest rate headwinds Operating EPS Operating margin (a) (a) $ 4.02 32 % Net interest revenue down reflecting deposit mix shift and lower interest rates Expenses down AUC/A (a) Investment servicing fees stable, ~50% of to
Slide 4: 4Q19 Financial Highlights
4Q19 Financial Highlights ($ millions, except per share data) 4Q19 3Q19 4Q18 Total revenue $4,778 24% 19% Fee revenue 3,971 27 26 Net interest revenue 815 12 (8) Provision for credit losses (8) N/M N/M Noninterest expense 2,964 14 (1) Income before income taxes 1,822 42 79 Net income applicable to c
Slide 5: 2019 Financial Highlights
2019 Financial Highlights ($ millions, except per share data) 2019 2018 Total revenue $16,462 - % Fee revenue 13,236 3 Net interest revenue 3,188 (12) Provision for credit losses (25) N/M Noninterest expense 10,900 (3) Income before income taxes 5,587 8 Net income applicable to common shareholders $
Slide 6: Capital and Liquidity
Capital and Liquidity 4Q19 3Q19 4Q18 Consolidated regulatory capital ratios: (a) Common Equity Tier 1 (“CET1”) ratio 11.5% 11.1% 10.7% Tier 1 capital ratio 13.6 13.2 12.8 Total capital ratio 14.4 14.0 13.6 Tier 1 leverage ratio 6.6 6.5 6.6 Supplementary leverage ratio (“SLR”) 6.1 6.0 6.0 Average liq
Slide 7: Balance Sheet
Balance Sheet ($ billions unless otherwise noted) Average Interest-Earning Assets Average Deposits +4% +1% +5% 294 298 +2% › Higher net interest revenue sequentially, excluding 3Q19 286 (a) impairment 232 51 53 226 › interest and noninterest-bearing deposits up 54 (a) 221 2.72% › loans and securitie
Slide 8: Yield Curve and Net Interest Revenue
Yield Curve Net Interest Revenue 10/17/19 1/10/20 2.2% 2.0% 1.8% 1.6% 1.4% 1m 3m 12m 2Y 5Y 10Y Drivers of Sequential NIR Change ($ millions) USD LIBOR US Treasury 815 70 800 730 3Q19 + Lease-related 3Q19 excluding + Average + Average IB + Lower − Lower interest- 4Q19 impairment impairment(a) NIB dep
Slide 9: Noninterest Expense
Noninterest Expense ($ millions) 4Q19 3Q19 4Q18 › Noninterest expense down 1% year-over-year, or Staff $1,639 11% 2% up 2% excluding notable items(a) Professional, legal and other purchased 367 16 (4) services – increase primarily reflects continued investments in technology Software and equipment 3
Slide 10: Investment Services Financial Highlights
Investment Services Financial Highlights ($ millions unless otherwise noted) 4Q19 3Q19 4Q18 › Asset Servicing down 3% year-over-year on lower net Total revenue by line of business: interest revenue and foreign exchange revenue, partially Asset Servicing $1,397 (1)% (3)% Pershing 570 - 2 offset by th
Slide 11: Investment Services - Revenue Drivers
Investment Services - Revenue Drivers ($ millions) (3)% +2% (6)% - % +1% 1,435 570 441 329 280 1,397 558 415 328 278 4Q18 4Q19 4Q18 4Q19 4Q18 4Q19 4Q18 4Q19 4Q18 4Q19 Asset Servicing Pershing Issuer Services Treasury Services Clearance and Collateral + AUC/A + Client assets and + Corporate Trust new
Slide 12: Investment Management Financial Highlights
Investment Management Financial Highlights ($ millions unless otherwise noted) 4Q19 3Q19 4Q18 › Asset Management revenue up 4% year-over-year Total revenue by line of business: Asset Management $688 14% 4% on higher market values and the impact of hedging Wealth Management 287 1 (5) activities, part
Slide 13: Other Segment
Other Segment ($($ millions) millions) 4Q19 3Q19 4Q18 › Total revenue increased primarily reflecting the gain $836 $5 $29 Fee revenue on sale of an equity investment Net securities (losses) (23) (1) - Total fee and other revenue 813 4 29 › Net interest expense decreased sequentially Net interest (ex
Slide 14: Appendix
wy S_ BNY MELLON Appendix
Slide 15: Footnotes
Footnotes 4Q19 Financial Highlights - Page 4 (a) Operating leverage is the rate of increase (decrease) in total revenue less the rate of increase (decrease) in total noninterest expense. (b) Quarterly returns are annualized. See page 18 for corresponding reconciliation of this non-GAAP measure. (c)
Slide 16: Fourth Quarter Results – Impact of Notable Items
Fourth Quarter Results – Impact of Notable Items 4Q19 4Q18 4Q19 vs 4Q18 Results - Notable Results – Results – Notable Results – GAAP non- ($ in millions, except per share data unless otherwise noted) GAAP items(a) non-GAAP GAAP items(b) non-GAAP GAAP Fee revenue $3,971 $815 $3,156 $3,146 $— $3,146 2
Slide 17: Full Year Results – Impact of Notable Items
Full Year Results – Impact of Notable Items FY19 FY18 FY19 vs. FY18 Results - Notable Results – Results – Notable Results – GAAP non- ($ in millions, except per share data unless otherwise noted) GAAP items(a) non-GAAP GAAP items(b) non-GAAP GAAP Fee revenue $13,236 $815 $12,421 $12,842 $(13) $12,85
Slide 18: Return on Common Equity and Tangible Common Equity Reconciliation
Return on Common Equity and Tangible Common Equity Reconciliation ($ millions) 4Q19 3Q19 4Q18 FY19 FY18 Net income applicable to common shareholders of The Bank of New York Mellon Corporation – $1,391 $1,002 $832 $4,272 $4,097 GAAP Add: Amortization of intangible assets 28 30 35 117 180 Less: Tax im
Slide 19: Pre-tax Operating Margin Reconciliation - Investment Management Business
Pre-tax Operating Margin Reconciliation - Investment Management Business ($ millions) 4Q19 3Q19 4Q18 Income before income taxes – GAAP $245 $300 $247 Total revenue – GAAP $975 $890 $963 Less: Distribution and servicing expense 93 98 95 Adjusted total revenue, net of distribution and servicing expens
Slide 20: 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,
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